May 28, 2024

JPMorgan Chase and Apollo, two financial powerhouses, have unveiled ambitious plans for an enterprise mainnet through their collaboration on the Monetary Authority of Singapore’s (MAS) Project Guardian pilot project. 

The executives behind this strategic move provided insights into the groundbreaking initiative.

Tokenized Mainnet Partnership

The collaboration focuses on testing digital assets for more efficient investment and management of discretionary portfolios. It will also address challenges related to automated portfolio rebalancing and customization at scale.

In a recent Forbes interview, Christine Moy, a partner at Apollo Global Management, shed light on the role of production-grade tokenization in creating JPMorgan’s innovative tool to manage liquidity usage.

Furthermore, Moy highlighted the enterprise mainnet’s potential, drawing parallels with the success of Ether as a first mover in the digital currency space. She sees it as a first-mover advantage in offering tokenized investment instruments.

JPMorgan’s blockchain head, Tyrone Lobban, cited that the system has already processed an impressive $900 billion in assets. 

Lobban also emphasized the transformative impact, stating that there was no tool like this one before now, taking the team to a benchmark of $2 billion a day of intraday repo trades through their platform.

Notably, this enterprise mainnet is designed to provide scalability, allowing for the seamless integration of applications into a network populated by institutional banks, broker-dealers, and asset managers adhering to Know Your Customer (KYC) compliance.

Meanwhile, under the broader umbrella of Project Guardian, financial institutions are collaborating to identify optimal software stacks that promote agnostic interoperability across various pools of assets. In a regulatory context, on November 24, MAS rolled out measures for digital payment token (DPT) service providers.

The guidelines aim to discourage speculation in virtual asset investments, focusing on assessing customers’ risk awareness, restricting credit card purchases, and eliminating incentives for retail clients engaging in price speculation.

This regulatory backdrop adds a layer of importance to the initiatives undertaken by JPMorgan and Apollo in the evolving space of digital finance.

Recent Deals Between Both Parties

Looking beyond this collaboration, earlier in November, J.P. Morgan and Apollo Global also partnered to unveil a proof-of-concept for a blockchain-based asset management system in collaboration with Avalanche.

This initiative is part of the larger Monetary Authority of Singapore’s Project Guardian, which seeks to innovate asset and wealth management practices through the strategic use of blockchain technology, smart contracts, and tokenization.

The proof-of-concept involves the integration of Onyx, the blockchain platform by J.P. Morgan and Apollo Global, with Avalanche through the LayerZero protocol.

Notably, the Avalanche Evergreen subnet, specifically designed to meet institutional requirements, serves as the foundational blockchain for this pioneering venture, prioritizing network privacy, gas features, and permissions.

Following this announcement, the native token of the Avalanche blockchain, AVAX, witnessed a substantial 26% surge in value within the past 24 hours, reaching an impressive $22.69. 

Meanwhile, AVAX has demonstrated remarkable growth over the last month, registering a remarkable 142% increase amid a broader market rally.

The established infrastructure resulting from this collaboration holds significant implications. It empowers portfolios managed by Onyx Digital Assets to seamlessly access tokenized funds offered by a New York-based asset manager, WisdomTree, boasting a valuation of $94 billion.

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