Key Takeaways
- JPMorgan and DBS are exploring interoperability for tokenized deposits.
- The two banks are both leaders in the field.
- Building interoperability between different systems is a top priority for global banks.
Starting with JPMorgan’s JPM Coin (JPMC) in 2019, a string of commercial banks have launched tokenized deposits in recent years.
However, these systems currently operate in silos, only facilitating transfers between accounts at the same bank.
Hoping to bridge the divide between their respective platforms, on Tuesday, Nov. 11, JPMorgan and DBS announced plans to build a new interbank transfer framework for deposit tokens.
And they aren’t the only ones chasing interoperability.
Commercial Bank Liabilities Move On-Chain
As tokenized deposits have gained traction, JPMorgan has emerged as a leading global player in this field.
Building on the success of JPMC, the bank launched a second token, JPMD, earlier this year.
While both tokens are issued via JPMorgan’s blockchain platform, Kinexys, they differ in design and application.
JPMC is strictly for internal settlement between JPMorgan accounts and is primarily used for corporate treasury management.
On the other hand, JPMD was designed with a broader range of use cases in mind, potentially including interbank payments.
For its part, DBS has built a sophisticated token scheme that spans USD and SGD deposits.
In an initial pilot, Ant International used DBS Treasury Tokens to power internal cross-border transfers.
JPMorgan and DBS Back Interoperability
DBS and JPMorgan make natural partners for exploring deposit token interoperability.
DBS Token Services and Kinexys are both blockchain-agnostic, and the two banks have broad experience transferring value across diverse public and private networks.
They are also both involved in other initiatives that are developing interbank frameworks for tokenized deposits.
As part of the Monetary Authority of Singapore’s (MAS) Project Guardian, DBS has participated in projects exploring interoperability between deposit tokens, stablecoins, and central bank digital currencies (CBDCs).
It has also piloted blockchain-based euro transactions in partnership with Deutsche Bank.
Meanwhile, JPMorgan is involved in some of the most ambitious projects aiming to reduce friction between banks as the transition toward on-chain financial infrastructure.
Alongside other major institutions, it is part of the Regulated Liability Network, an industry-wide initiative to build a shared ledger for tokenized deposits and central bank money.
It has also joined a coalition of American banks exploring a joint stablecoin. Finally, at the international level, JPMorgan is involved in Swift’s ongoing blockchain experiments.
Top Trending Crypto Articles
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
