In a major step toward bringing traditional finance and blockchain closer, JPMorgan’s blockchain unit Kinexys, Chainlink, and Ondo Finance have successfully tested the settlement of a tokenized U.S. Treasuries fund across two different blockchain networks.
The trial showed how assets can move between a public blockchain, Ondo Chain, and a permissioned blockchain (JPMorgan’s Kinexys Digital Payments network) at the same time, securely and efficiently.
How the Test Worked
The test used a process called Delivery versus Payment (DvP), where the asset and payment are exchanged at the same time, which in turn reduces risks where one party might fail to deliver their side of the deal.
According to the firms involved, these issues have cost the financial industry an estimated $914 billion over the past decade. For this trial, the asset used was 0USG, a tokenized short-term U.S. Treasuries fund issued by Ondo Finance.
Payments were settled using blockchain deposit accounts on Kinexys, while Chainlink’s technology helped connect and coordinate the two different blockchains, making sure the transaction was secure and smooth.
This successful test shows a growing interest from financial institutions in using public blockchains while meeting high security and compliance standards.
Sergey Nazarov, co-founder of Chainlink said this test shows how big institutions are looking to safely connect with public blockchains while meeting security and compliance needs
“It is becoming increasingly clear to the world’s institutions that they have a large addressable market in the public chain community and that they need a reliable set of technical standards and cross-chain connection capabilities to successfully transact in this new world,” he said.
Nathan Allman, CEO of Ondo Finance, called this test not just a milestone but “a statement about the future of finance.” JPMorgan’s Kinexys platform is already moving large amounts of money. Since 2019, it has handled over $1.5 trillion in transactions, with daily volumes now over $2 billion. But compared to JPMorgan’s total payment business, which moves about $10 trillion daily, there’s still a lot of room to grow.
