As part of experimental projects with the central bank of Singapore, JP Morgan transacted on the decentralized finance (DeFi) protocol Aave Arc for the first time.
JP Morgan experiments with Aave smart contracts
Despite what its CEO publicly says, the activities of JP Morgan in cryptocurrencies are no longer a secret and the bank has just renewed its appeal for the blockchain through its first transactions on the Aave protocol. It is more precisely a modified version of Aave Arc, the platform dedicated to institutional investors:
WORLD! JP Morgan has executed its 1st *LIVE* trade on public blockchain using DeFi, Tokenized Deposits & Verifiable Credentials, part of @MAS_sg Project Guardian 🙌🚀🔥https://t.co/XI212SG4zg Many world 1sts here, & since this is public ⛓ here’s a transparent🧵on what we did:
—Ty Lobban (@TyLobban) November 2, 2022
In order to optimize the weight of the transaction costs generated by important identity verification proceduresthese operations were performed on Polygon (MATIC).
The fork of Aave Arc’s code allowed the bank to configure your own settings as you wish, particularly with regard to interest rates. These early experiments involved the use of tokenized Singapore dollars and Japanese yen.
This pilot project is carried out in collaboration with the Monetary Authority of Singapore (MAS) and stands out for the use of a public blockchain, allowing the consultation of said operations by everyone.
Umar Farooq, the CEO of Onyx which is the blockchain division of the bank, commented on this experiment:
“By leveraging verifiable credentials to establish identity, we were able to execute a live transaction between known attested parties. This is a significant milestone in the blockchain journey for financial institutions and follows many years of work by JP Morgan in developing blockchain-based solutions for financial services. »
👉 To go further – How to buy AAVE tokens? Instructions for use 2022
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A desire to tokenize finance
In addition to the tokenization of currencies, that of government bonds also comes into play in this program.
For the central bank of Singapore, the view is therefore resolutely focused on experiments around the blockchain. And for good reason, the MAS conducted this operation with JP Morgan as part of the “Project Guardian” program. This vast plan consists of a set of projects aimed at test the value propositions brought by DeFi innovationsin order to consider their use in the longer term.
DBS Bank also works alongside JP Morgan and MAS in these various programs. Kwee Juan Han, the head of the bank’s strategy and planning group, was optimistic about these technologies:
“We are thrilled to be part of this pilot project where Singapore is leading the reimagining of financial market infrastructure with blockchain technology. The success of the test transactions shows a promising application of tokenization and DeFi techniques for the government bond market. »
If sometimes certain speeches can suggest the opposite, these concrete actions show once again the growing interest in blockchain technologies.
👉 Read also – JP Morgan recruits at Celsius, although its CEO calls cryptocurrencies a Ponzi
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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