American investment bank J.P. Morgan Chase & Co will be exploring DeFi innovation with the Monetary Authority of Singapore (MAS) by piloting the tokenization of DeFi on public blockchain networks.
J.P. Morgan Wades into DeFi With Singapore
The project will be carried out by using tokenized bonds and deposits in a permissioned liquidity pool for DeFi transactions involving borrowing and lending on a public blockchain.
Joining J.P. Morgan for the pilot program are DBS Bank, and Marketnode, a SGX joint venture for bonds, which will act as “trust anchors”. Although it will be leveraging public blockchains, the solution is only geared towards the wholesale market, and will not be available to retail investors.
The news comes after the CEO of J.P. Morgan Chase Jamie Dimon outlined the importance of decentralized finance (DeFi) and blockchain in his annual letter to shareholders.
Singapore Goes Big on Blockchain
The Monetary Authority of Singapore has been supportive of the blockchain, and is seeking to explore four aspects of the technology;
- Open, interoperable networks;
- Trust anchors;
- Asset tokenization;
- Institutional grade DeFi protocols.
Mr Sopnendu Mohanty, Chief FinTech Officer of the MAS, explained that, through the project, the MAS is seeking “to sharpen our understanding in this rapidly transforming digital assets ecosystem.”
On the Flipside
- The MAS has previously shared its concerns about the risks involved with cryptocurrencies, and discouraged retail investors from owning them.
Why You Should Care
J.P. Morgan is working with Singapore to find ways of harnessing the benefits of DeFi, while also mitigating the risks involved in the industry.
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