JPMorgan’s Kinexys Links to Public Blockchain with Launch on Ondo Chain Testnet

JPMorgan has made its initial foray into a public blockchain with the Kinexys Digital Payments platform, successfully settling a tokenized U.S. Treasury transaction on the Ondo Chain’s testnet.

This pilot program represents the first Delivery versus Payment (DvP) transaction carried out on the testnet, a newly developed layer-1 blockchain aimed at facilitating institutional-grade real-world asset transactions.

Kinexys, which reportedly processes an average of more than $2 billion in transactions daily, managed the payment aspect, while Ondo Finance’s tokenized short-term Treasury fund, known as OUSG, constituted the asset component. The settlement across the two networks was protected by Chainlink Runtime Environment, a system designed for monitoring cross-chain processes.

This marks the inaugural execution of a transaction on a public blockchain for Kinexys, JPMorgan’s restricted network. This action highlights the bank’s exploration of expanding its institutional payment infrastructure into the burgeoning field of real-world asset tokenization.

Nelli Zaltsman, who leads settlement solutions at Kinexys, expressed that this integration allows them to seamlessly connect their institutional payments solution with various public and private blockchain infrastructures, ultimately providing clients and the broader financial ecosystem with enhanced benefits and scalable transaction settlement solutions.

The release emphasizes that traditional finance often faces challenges with DvP transactions, which necessitate that payments occur either before or simultaneously with the delivery of securities, owing to disjointed systems and manual processes that can delay settlements.

It cites data indicating that failures in payment and settlement have cost market players over $900 billion over the last decade. The application of blockchain technology is presented as a solution for executing simultaneous cross-chain transactions.

JPMorgan has been broadening its blockchain-enabled payments network and has recently introduced support for accounts denominated in British pounds.