Tyrone Lobban, head of JPMorgan's blockchain unit, told the CCData Digital Asset Summit in London that "99.9%" of his conversations with clients are about tokenized forms of traditional financial instruments, not cryptocurrencies.
Customers focus on tokenization of traditional finance, not cryptocurrencies
According to Decrypt’s report, JPMorgan Chase & Co., which has been deeply involved in blockchain technology for many years, Tyrone Lobban, head of its blockchain department, said at the CCData Digital Asset Summit in London that his conversations with customers “ "99.9%" is about tokenized forms of traditional financial instruments, not cryptocurrencies.
There is extensive discussion about how to put traditional assets on the blockchain. When you look back at the past year, almost every bank, broker-dealer, or asset manager was doing something on a permissioned blockchain or a public blockchain.
Bitcoin is more like stablecoin, the days of huge returns are over
When it comes to cryptocurrencies, Lobban blamed the recent spate of industry bankruptcies on waning interest, saying "some customers don't necessarily want to get involved right now." He also mentioned Bitcoin's recent price stability, saying the world's most popular cryptocurrency "may be more like a stablecoin now," and opined
The days of huge Bitcoin returns may be over for a while!
Avoid public blockchain regulatory issues with Onyx
JPMorgan Chase has launched its own Onyx blockchain network in 2020. It is an early traditional financial institution that embraced blockchain technology. They also issued their own deposit token JPM Coin, which is anchored to the U.S. dollar at 1:1. And use the technology of Onyx Digital Assets to realize the exchange of different types of digital assets.
Lobban mentioned that U.S. banks that want to use public blockchains face various bureaucratic hurdles and red tape due to the current regulatory environment. To circumvent this, JPMorgan built Onyx, a private blockchain based on Ethereum.
While this means the JPMorgan team can write smart contracts for public blockchains, Lobban still believes that cryptocurrencies lack interoperability.
Ultimately, what you probably need is some kind of connectivity between these platforms, or some kind of broader first layer that financial institutions can actually interact with.
Use smart contracts to reduce costs and ensure delivery
As an investment bank, JPMorgan Chase provides credit lines to its institutional clients. The process may be too costly for some clients because while JPMorgan's credit lines are free to use, borrowers must still hold enough assets to prove to regulators that they can survive times of stress or the bank's fulfill its obligations when its lines of credit are withdrawn.
Through Onyx, JPMorgan clients will be able to enter into repurchase agreements (repos) to provide collateral in the form of tokenized Treasury bills for borrowing and lending, Lobban said. Customers can be very specific about how long they actually need the credit, say borrowing $1 billion in three hours, or $500 million in five hours.
The highlight of this technology is that we are able to use smart contracts to ensure delivery and payment, converting assets into cash at the right time, and we can have very precise control over the terms of trade between both parties when all parties agree.
More about Onyx:
JP Morgan Onyx blockchain realizes killer application of traditional finance
Lightning transactions for traditional banks? DBS Bank leverages JPMorgan Chase’s blockchain network Onyx to complete buyback transactions
JPM Coin, which is more stable than stablecoins, in addition to the US dollar, JPMorgan Chase also entered the euro market
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