JP Morgan Crypto: first international banking transaction on Polygon
JP Morgan made history by completing its first international transaction using Ethereum’s layer 2 network, Polygon. The trade was part of the Monetary Authority of Singapore’s Project Guardian, an initiative exploring the potential of blockchain in wholesale funding. Additionally, the project is a massive step forward in the institutional use of blockchain technology. Here’s everything you need to know about JP Morgan’s first international crypto transaction.
JP Morgan’s crypto trading is a major first in traditional finance.
JP Morgan made history with this cross-border transaction. This is the first time that a large traditional financial institution has made a transaction using a public blockchain. The bank carried out the transaction using Polygon, the Ethereum layer 2 blockchain and a modified aave protocol, eliminating third parties. Additionally, the bank transferred tokenized cash deposits using its blockchain division, Onyx. Aave developers commented on the landmark transaction on Twitter.
“@jpmorgan transacting on a public blockchain using Aave smart contracts is a milestone for DeFi,” it reads. Twitter feed. “[A]nd represents a massive step towards bringing traditional financial assets into DeFi […].”
According to Forbes, JP Morgan’s embrace of crypto is somewhat surprising. Because the bank’s CEO, Jamie Dimon, notoriously called crypto a “decentralized Ponzi scheme” in September 2022.
Project Guardian is testing the potential of blockchain technology in institutional finance.
Singapore Deputy Prime Minister Heng Swee Keat launched Project Guardian in partnership with international financial institutions in May 2022. Basically, they aim to test and securely implement “institutional-grade DeFi protocols” for revolutionize international banking. Additionally, JP Morgan’s pilot test is the beginning of the project’s goal to create a liquidity pool for tokenized bonds and deposits.
Especially if successful, Project Guardian could make Singapore a leader in the institutional adoption of blockchain technology. Additionally, the UK House of Commons recently passed a bill recognizing crypto as a regulated asset. And after the recent collapse of FTX, several crypto executives are calling for clearer guidelines in the US.