JPMorgan (JPM) and Singapore’s DBS Bank (D05) are developing a framework to allow institutional clients to move tokenized deposits across different blockchain networks.
The system would link DBS Token Services with JPMorgan’s Kinexys Digital Payments project, enabling interbank and cross-chain settlements, the banks said in an emailed announcement Tuesday.
Both banks already allow instant payments within their own blockchain systems. This new effort would connect those closed networks, allowing customers to send value between institutions without relying on traditional payment pathways.
“Working with DBS on this initiative is a clear example of how financial institutions can collaborate to promote the benefits of tokenized deposits to institutional clients, while protecting the uniqueness of money and ensuring interoperability between markets,” said Naveen Mallela, global co-head of Kinexys at JPMorgan.
JPMorgan, which made its first moves into blockchain finance several years ago, recently took a step further into decentralized finance (DeFi), issuing a USD deposit token on Coinbase’s Base blockchain, a layer 2 public ledger.
The new agreement would allow a JPMorgan client to use their deposit tokens on the Base blockchain to pay a DBS client, for example, who could then redeem or hold those tokens on the DBS platform.
The move reflects a growing effort among major banks to make digital deposits work seamlessly across systems and jurisdictions. About a third of banks around the world have introduced or are exploring tokenized deposit projects, according to the Bank for International Settlements (BIS).
