DBS Bank and J.P. Morgan have announced a strategic partnership to develop a framework that facilitates the transfer of tokenised deposits across various blockchain networks. This initiative aims to enable real-time settlement between institutional clients of Southeast Asia”s largest bank and its U.S. counterpart.
The collaboration, which involves DBS Token Services and J.P. Morgan”s blockchain unit Kinexys, is designed to enhance interoperability between public and permissioned blockchains. If successful, this framework could provide seamless exchange and settlement capabilities for tokenised deposits, potentially allowing for 24/7 cross-border transactions between the two banks.
Under the proposed system, a client of J.P. Morgan could initiate a payment using J.P. Morgan Deposit Tokens on the Base public blockchain. The recipient at DBS would then have the option to exchange or redeem these tokens for their equivalent value via DBS Token Services. This setup is intended to ensure the fungibility of tokenised deposits across different financial institutions and blockchain platforms, a necessity in today”s fragmented digital asset landscape.
“Instant 24/7 payments provide businesses with the optionality, agility and speed to navigate global uncertainties and capture emerging opportunities,” stated Rachel Chew, the group chief operating officer and head of digital currencies at DBS Bank. She emphasized that interoperability is crucial in minimizing fragmentation within the expanding digital asset ecosystem.
Both banks currently operate distinct blockchain-based payment systems, offering their clients continuous liquidity and real-time settlement within their respective environments. The new framework is set to create “interoperability highways,” which would enhance the capacity for cross-bank on-chain transactions.
Naveen Mallela, global co-head of Kinexys at J.P. Morgan, mentioned the firm”s commitment to constructing next-generation financial infrastructure, leveraging industry expertise and international collaborations.
This initiative arrives at a time when tokenised deposits are gaining momentum on a global scale. A recent survey by the Bank for International Settlements indicated that one-third of commercial banks across various jurisdictions have either launched, piloted, or explored tokenised deposit products.
The partnership signifies a pivotal advancement toward addressing the challenges posed by fragmentation in the digital asset realm, where a multitude of blockchain networks and token issuers complicates the ability for institutional users to transfer funds across different platforms and borders.
