Kostyantyn Kryvopust: JPMorgan continues tokenization plans despite crypto slump and regulatory hurdles


Big Wall Street investment bank JPMorgan is pushing to tokenize traditional financial assets despite last year’s market downturn.

According to Tyrone Lobban, head of JPMorgan’s Onyx digital asset and tokenization platform, the bank has already processed about $700 billion in short-term loans on Onyx, with more to come.

“We think tokenization is a killer program for traditional finance,” Lobban was quoted as saying in an interview with CoinDesk this week, adding:

“If you think about the private markets — private credit, private equity and private real estate — they’re almost twice the size of the public markets, but they’re orders of magnitude less liquid, so there’s a huge difference.”

Temporary failure

Despite his optimism for the future, Lobban acknowledged in an interview that the Onyx team has experienced the impact of the crypto market downturn as well as the regulatory crackdown in the US, and said that things may take a little longer than expected. .

“The timelines might be a little bit longer than before, but our strategy hasn’t changed at all,” Lobban said.

He added that recent setbacks mean very little in the long run.

“In any case, there is so much work that such short-term dips are really very insignificant in the long run. We’re fortunate to have the resources to actually execute these very large use cases, and if we can help bring more clarity to regulators and help them understand the value, that’s good too,” JPMorgan’s Lobban. said

Onyx is a permissioned version of the Ethereum blockchain created by JPMorgan for use between various banking partners.

Until now, the platform has mainly been used for transactions in the so-called repo (repurchase) market, a market where institutions can borrow assets for short-term financing needs.

Banks known to have joined JPMorgan on the platform include Goldman Sachs ( GS ), BNP Paribas and DBS Bank, while several other banks and financial institutions are considering joining.

When word first emerged last May that JPMorgan was serious about its tokenization plans, some in the crypto community said that the fact that banks were showing off their enterprise blockchain projects could be seen as “a signal that we in a bear market” . .”

In addition to Onyx, JPMorgan is well known in crypto circles for having launched its own centralized digital token known as JPM Coin back in 2019.

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