JPMorgan Executes First DeFi Transaction For Singapore's Project Guardian

Multinational banking behemoth JPMorgan Chase & Co JPM has completed the first-ever cross-border transaction using decentralized finance (DeFi) on an open blockchain.

The trade was facilitated by the Monetary Authority of Singapore’s (MAS) Project Guardian on Nov. 2.

Project Guardian was established to explore potential decentralized finance applications in wholesale funding markets and has completed its first live trades.

More industry pilots have been launched to test the application of asset tokenization and DeFi across a broader range of use cases in the financial sector.

Details On Project Guardian

Singapore-based DBS bank, Tokyo-based SBI Digital Asset Holdings and business leadership platform Oliver Wyman Forum were also a part of the pilot program, which involved conducting foreign exchange and government bond transactions against liquidity pools comprising tokenized Singapore Government Securities Bonds, Japanese government bonds, Japanese yen (JPY) and the Singapore Dollar (SGD).

JPMorgan's trade was executed on the Ethereum ETH/USD layer-2 network Polygon using a modified version of the Aave protocol’s smart contract code.

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How Digital Assets Can Transform Capital Markets

Sopnendu Mohanty, chief fintech officer, MAS, said the live pilots demonstrated that with the appropriate guardrails in place, digital assets and decentralized finance have the potential to transform capital markets.

He added that this was a big step toward enabling more efficient and integrated global financial networks.

“Project Guardian has deepened MAS’ understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy. We look forward to working with more institutions to advance global learning on policies, standards, and best practices for digital asset regulation and responsible innovation,” Mohanty said.

JPMorgan Selects Polygon Due To Cheap Gas Fees

Tyrone Lobban, head of Onyx Digital Assets said JP Morgan sought to execute the trade on Ethereum and selected Polygon due to its reasonable gas costs.

He also noted the Singapore central bank's desire for open/interoperable networks and added that further phases of Project Guardian will also examine alternative blockchains.

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