JPMorgan Chase & Co (NYSE:JPM), the largest bank in the US, has executed its first live trade on a public blockchain, signalling a major step forward for blockchain technology in the traditional finance sector.
Through the trade, JPM issued 100,000 tokenised Singapore dollars (US$71,000) on the Polygon Layer-2 blockchain using the Aave decentralised finance (DeFi) protocol.
JPM then exchanged the tokenised Singapore dollars for tokenised Japanese yen, with SBI Digital Asset Holdings on the other side of the transaction.
Since the parties used virtual representations of fiat currencies, the trade was not technically a cryptocurrency transaction, yet it shows the extent to which major financial institutions are getting serious about blockchain technology.
The trade occurred as part of the Monetary Authority of Singapore (MAS) ‘Project Guardian’ pilot, which is exploring the use of DeFi in the wholesale funding markets.
“Today was the first step to show that we can actually trade on these public networks,” said Tyrone Lobban, head of Blockchain Launch and Onyx Digital Assets at JPMorgan.
“We clearly see what’s happening in the public domain and we can see how the innovation is creating not only new ways of doing financial transactions, but new types of products as well,” added Lobban.
Although JPM has been eager to adopt blockchain technology, the bank’s chair Jamie Dimon remains an ardent cryptocurrency sceptic.
He reiterated his opinion recently after dismissing cryptocurrencies, including bitcoin, as “decentralised Ponzi schemes at a Democrat-led House Financial Services Committee.
Polygon soars
Polygon’s native MATIC token soared over 12% in the past 24 hours, though the landmark JPM trade was just one of two major fundamental causes.
Instagram and Facebook (NASDAQ:META) parent Meta concurrently announced that Polygon will be the home platform for its upcoming NFT plans.
Social media users will soon be able to mint and sell NFT with zero commission fees.
MATIC trading volumes have tripled in the past day, and its market capitalisation has reached US$8.2bn, making it the 11th-largest cryptocurrency globally.