JP Morgan Conducts The First DeFi Transaction On A Public Blockchain

Decentralized finance (DeFi) on a public blockchain was successfully used by multinational financial corporation JP Morgan to complete its first ever cross-border transaction.

The trade was facilitated by the Monetary Authority of Singapore’s (MAS) Project Guardian on Nov. 2 — which was established as part of a pilot program to “explore potential decentralized finance (DeFi) applications in wholesale funding markets.” The pilot, which included the participation of Oliver Wyman Forum, SBI Digital Asset Holdings, and DBS Bank, was another step in studying how conventional financial institutions may employ tokenized assets and DeFi protocols to carry out financial transactions, among other use cases.

Using a modified version of the smart contract code from the AAVE protocol, the deal was carried out on the Ethereum layer-2 network Polygon.

According to MAS, tokenized Singaporean Dollar and Japanese Yen deposits were used in a "live cross-currency transaction," coupled with a practice exercise where tokenized government bonds were bought and sold.

As many of the biggest financial players predicted, the tokenization of real-world assets using blockchain technology will lead to great things in the future. While Cynthia Wu, COO of digital asset service platform Matrixport, recently told Cointelegraph that nonfungible tokens (NFTs) might be the vehicle used to represent off-chain assets like real estate titles, stocks, and bonds, she also stated that "virtually anything could be tokenized in 5-10 years."