JPMorgan's Onyx blockchain achieves killer applications for traditional finance

Tokenized assets representing RWA have recently been extensively covered by major financial and cryptocurrency institutions. Following detailed reports released by Citigroup and Binance, JPMorgan Chase, known for the most in-depth blockchain applications in traditional finance, has also emphasized that tokenization is a killer application for traditional finance. JPMorgan Chase stated that they have many practical resources that may help regulatory agencies gain a clear understanding of the value of blockchain.

For a more detailed introduction to tokenized assets: Real-world assets RWA—bridging the friendship between traditional finance and DeFi

JPMorgan's Onyx Blockchain Developed In-house

JPMorgan launched its own Onyx blockchain network in 2020, which is a permissioned version based on Ethereum, consisting of the following four main functionalities:

1. Liink: Provides information exchange services for blockchain payments for financial institutions
2. Coin Systems: Utilizes JPM Coin, a stablecoin issued by JPMorgan, allowing customers to make instant transfers and cross-border payments
3. Onyx Digital Assets: Facilitates the exchange of various types of digital assets
4. Blockchain Launch: A technical unit responsible for developing new applications and commercializing them

Onyx Digital Assets has processed nearly $700 billion in short-term loan transactions. Clients who have used it include Goldman Sachs, BNP Paribas, and DBS Bank. Tyrone Lobban, head of Onyx, stated in an interview with CoinDesk that 15 banks and broker-dealers are currently registering with them.

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Tokenization: The Killer App for Traditional Finance

Lobban mentioned that as the platform evolves, Onyx will focus on tokenizing assets that are traditionally difficult to finance, such as money market funds, and using them as collateral. In the future, Onyx plans to issue a broader range of assets, including private equity funds, on the blockchain.

Lobban stated:

Tokenization is the killer app for traditional finance. If you think about private markets, including private credit, private equity, and real estate, they're almost twice the size of public markets but significantly less liquid, creating a huge gap.

Case Study: Lightning Trades in Traditional Banks? DBS Bank Completes Repurchase Transaction Using JPMorgan's Onyx Blockchain Network

Impact of Bear Market and Regulations

However, the Onyx team has also felt the impact of the bear market and stricter regulatory scrutiny following the closure of many cryptocurrency companies. Lobban acknowledged the need for extra caution but emphasized that there have been no substantial changes at JPMorgan and Onyx.

Lobban mentioned:

There might be a slight extension in time, but our fundamental strategy hasn't changed. In the long run, these temporary lows are really insignificant. We're fortunate to have these resources that can generate a lot of practical use cases, and if we can use them to help regulators clearly understand this value, then it's a good thing.