JPMorgan Tokenizes PE Fund on In-house Blockchain

Let’s get digital, digital.

JPMorgan took another step toward decentralized finance last week when it tokenized and conducted a transaction of a private equity fund on its blockchain platform. The move is setting the table for the bank’s Kinexy’s Fund Flow, a tokenization platform it plans to roll out in full next year. JPMorgan expects to tokenize other alts, including private credit, real estate, and hedge funds, in the future, The Wall Street Journal reported. It’s also exploring the possibility of allowing clients to use fund tokens as collateral for borrowing or constructing a portfolio of tokenized assets.

“Enabling real-time tri-party settlement between fund managers, transfer agents and distributors will ultimately unlock new sources of liquidity and more flexible portfolio construction,” said Anton Pil, head of JPMorgan’s global alternative investment solutions. The firm did not comment on the specific PE fund that was tokenized. 

Eyes on Tokenize

JPMorgan CEO Jamie Dimon once described crypto as a “pet rock” (ouch). But while the bank and many other traditional lenders are warming to digital currencies, they’ve always seen more opportunity in blockchain technology that can tokenize any asset, financial or real, for faster, cheaper and easier trading: 

• Nearly a dozen major banks are jointly exploring issuing a stablecoin pegged to G7 currencies.
• This summer, Goldman Sachs and BNY Mellon announced a partnership that will tokenize money market funds managed by firms including their own, BlackRock and Fidelity. 
• Bank of America called tokenization the next step in financial markets’ evolution and described it as “mutual fund 3.0.”

Across the Pond. While the GENIUS Act has established a regulatory framework for US dollar-backed stablecoins and is fueling innovation in the token economy, Europe seems to be ahead of the curve in some regards. Last month, France’s Lise Exchange became the first European platform authorized to trade and settle listed shares entirely on blockchain. And just this week, Switzerland’s BX Digital partnered with the New York-based Ondo Finance to launch tokenized versions of stocks and ETFs on BX’s platform that can be traded 24/7.

We’ve got a couple of leftover skee ball tokens from Palace Amusements. Are those worth anything?