DBS and JPMorgan’s Kinexys are collaborating on a platform for interbank transfers of tokenised assets, supporting multiple blockchains.
The project’s aim is to establish a new industry standard for institutional digital payments.
Currently, both banks offer blockchain-based settlements exclusively within their ecosystems. Upon completion, the framework will create “interaction highways between the two organisations, covering both public and exclusive ledgers.”
According to the press release, the new platform will enable institutional clients to exchange or redeem tokenised deposits and conduct cross-border on-chain payments in real-time.
“For instance, a JPMorgan institutional client will be able to pay a DBS institutional client using JPMorgan deposit tokens (JPMD) on the public Base blockchain, and the recipient will be able to exchange or redeem them for an equivalent value through DBS’s crypto services,” company representatives explained the mechanics.
This approach aims to maintain “money unity,” where tokenised deposits between banks and blockchains are interchangeable and represent equal value.
According to DBS’s Chief Operating Officer Rachel Chu, creating a compatible framework is crucial for reducing fragmentation in digital cross-border money transfers.
The digitisation of assets is rapidly gaining popularity among financial institutions. According to a study by the Bank for International Settlements, by 2024, a third of surveyed commercial banks had launched, tested, or explored tokenised deposits.
Back in October, media reported that payment giant Mastercard would acquire cryptocurrency startup Zerohash for $2 billion. The project serves as a platform for tokenisation and stablecoin launches.