Investment banking giant JPMorgan anticipates that it has got its way for defi developers leveraging the non crypto assets’ yield generating potential.
Head of digital assets at Onyx, Tyrone Lobban said that the blockchain business unit of JPMorgan Chase and Co., Onyx aims to bring tokenized assets of worth trillion dollars to decentralized finance (DeFi). While speaking at Consensus 2022 in Austin, Texas, Tyrone Lobban described the further details about the institutional grade DeFi plans of the bank and also highlighted the value of tokenized assets that are waiting for the opportunity to blow up.
Lobban said that they think over time, tokenizing the United States Treasurys or revenues from the money market means that they all could be used potentially as collateral in decentralized finance pools. He further said that overall, the goal is to bring these assets worth trillions of dollars into DeFi space so that they can be used for trading, borrowing and lending along with the level of institutional assets
Generally, institutional DeFi means to impose restrictions on knowing your customer or KYC on permissionless lending pools of crypto. Such activities started to take place on several innovative projects including Aave Arc and Siam Commercial Bank and Compound Treasury.
According to Lobban, JPMorgans has plans to include the traditional assets point’s tokenization to a much larger extent. There are two complementary parts that Onyx Digital Assets is seeking to bring the proposed decentralized finance of institution grade to reality.
Further while detailing these components, he said that one component of this proposal is blockchain based collateral settlement system of JPMorgan, last month that was extended to include money market fund shares’ tokenized versions of investment management company Blackrock.
This is a kind of mutual fund that is invested in cash and short term debt systems with high liquidity. Onyx Digital Assets blockchain’s this kind of application has had a trading column of about $350 billion, which is settled in the JPM coin, the very own digital token of JPMorgan.
Labbon said that the second part is a recent test that is dubbed as ‘Project Guardian’. The project is being conducted under supervision of the Monetary Authority of Singapore and also includes other institutions like JPMorgan, DBS Bank and Marketnode. It is supposed to test the bank-friendly DeFi while using permissioned liquidity pools made up of deposits and tokenized bonds.
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