JPMorgan, DBS Bank, SBI conduct live Defi transactions on public blockchain

JPMorgan, DBS Bank and SBI Digital Asset Holdings have conducted their first live transactions on a public blockchain using decentralized finance (defi), tokenized deposits and verifiable credentials under the supervision of the Monetary Authority of Singapore (MAS). Singapore’s central bank is planning two more pilots involving Standard Chartered Bank, HSBC and UOB.

JPMorgan, DBS Bank, SBI, Standard Chartered Bank, HSBC, UOB are participating in MAS’ digital asset pilot projects.

The Monetary Authority of Singapore (MAS), Singapore’s central bank, announced Wednesday that “the first industry pilot under MAS’ Guardian project, which explores potential applications of decentralized finance (defi) in wholesale funding markets, has completed its first live transactions“.

The announcement states that for this pilot:

DBS Bank, JP Morgan, and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against pools of cash including Singapore government securities tokenized bonds, Japanese government bonds, Japanese yen (JPY) and Singapore dollars (SGD).

The Singapore central bank’s Project Guardian was announced in May. The regulator explained that since then, it “has engaged the financial sector to identify key areas of collaboration.”

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The announcement further reveals:

MAS launches two new industrial pilots.

The first focuses on trade finance. “Standard Chartered Bank is leading an initiative to explore the issuance of tokens linked to trade finance assets“, DSS noted. “The project aims to digitize the commercial distribution market, transforming commercial assets into transferable instruments that are more transparent and accessible to investors.

The second pilot focuses on wealth management. “HSBC and UOB work with Marketnode to enable native digital issuance of wealth management products, improving issuance efficiency and accessibility for investors“, describes the central bank.

Sopnendu Mohanty, Chief Fintech Officer of MAS, commented, “The live pilots conducted by industry participants demonstrate that with the right safeguards in place, digital assets and decentralized finance have the potential to transform capital markets. This is a big step toward building more efficient and integrated global financial networks.“The official added:

The Guardian project has enabled DSS to deepen its understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy.

Following the MAS announcement, Tyrone Lobban, head of blockchain launch and Onyx Digital Assets at JPMorgan, explained on Linkedin that the global investment bank has “executed its 1st LIVE transaction on the public blockchain using defi, tokenized deposits and verifiable credentials as part of the Monetary Authority of Singapore’s (MAS) Guardian project.

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He described, “This is a massive step towards a future where finance can take place conformally on the public blockchain using public defi protocols. The beginnings of institutional defi are here“. Lobban added:

This is the world’s first bank-issued tokenized deposit and the first transaction by regulated financial institutions using W3C-verifiable credentials for defi-compliant access on the public blockchain.

To achieve this, we used a modified version of Aave on the Polygon Technology blockchain to perform a tokenized SGD for JPY exchange with SBI Holdings LLC. And we built a digital identity solution that combines identity proofs with transaction instructions for “on-chain” verification, opening up a composable and pluggable identity world“, the JPMorgan executive concluded.

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