JP Morgan concludes first DeFi transaction on Aave smart-contracts
Coin Telegraph • November 08, 2022
If you were still doubting whether traditional financial institutions were embracing crypto and decentralized finance (DeFi), the latest news about Ethereum-based protocol Aave is proof.
Today, the team behind the protocol announced that banking giant JP Morgan Chase completed its first DeFi transaction. This marks a significant achievement for the industry, which continues to experience strong demand and adoption despite the downward trend in the price of cryptocurrencies.
A "modified" version of the Aave protocol was used by JP Morgan. The project utilizes Polygon, Ethereum's second-layer solution, because of its greater scalability. MAS said that a “live cross-currency transaction” was conducted, involving tokenized Singaporean dollar and Japanese yen deposits, along with a simulated exercise of buying and selling tokenized government bonds.
The transactions are part of the Monetary Authority of Singapore (MAS) led “Project Guardian.” The initiative explores ways to bridge legacy financial institutions with decentralized finances “across a broader range of use cases. In addition to JP Morgan, other major banking institutions are participating in the initiative, including DBS Bank, SBI Digital Asset Holding, and the Oliver Wyman Forum.
These transactions are the first in a series of pilot tests to explore the potential for DeFi and digital assets to improve the interoperability and efficiency of legacy financial markets.