JPMorgan Settles Tokenised Fund Trade on Public Blockchain

JPMorgan’s Kinexys links up with Ondo and Chainlink to execute a public chain settlement for tokenized money market funds.

It was a bit of a head-turner yesterday when JPMorgan announced it had tested its first tokenized asset transaction on a public blockchain.

Funny how Dimon keeps dunking on crypto in public while his team quietly builds the pipes in the background, as others are still stuck arguing about regulation. More on that below.

Here’s what else we’re covering today:

  • VanEck launches tokenized money market fund

  • SEC tokenization roundtable: key takeaways

  • Chat with BitGo COO about MiCA license

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NEWS FLASH

Regulation

Tokenization

TOKENIZATION

JPMorgan Settles Tokenised Fund Trade on Public Blockchain

A new frontier: Yesterday, Ondo Finance, Chainlink, and JPMorgan announced a new interoperability milestone: for the first time, JPMorgan’s Kinexys Digital Payments (formerly JPM Coin) was used to settle a delivery-versus-payment (DvP) transaction for a tokenized asset issued on a public blockchain.

How the flow worked:

  • Cash & Asset: JPMorgan’s Kinexys blockchain settled the payment leg, while the asset leg — the delivery of OUSG, a tokenized money market fund issued by Ondo — took place on the Ondo Chain testnet.

  • Orchestration: The two environments were orchestrated using Chainlink’s Runtime Environment (CRE), which acted as the “middleware” — coordinating both sides of the transaction and enabling atomic settlement while enforcing DvP rules, identity checks, and fallback conditions.

Kinexys in numbers: Launched in 2019, the permissioned ledger already processes ≈US $2 billion a day and has handled more than US $1.5 trillion in total volume with its use largely limited to internal JPM flows.

  • External integrations have been limited, though not absent: In 2024, Kinexys (then branded JPM Coin under Onyx) settled the cash leg of a Siemens commercial paper pilot, with the asset leg recorded on SWIAT’s permissioned blockchain. But the Ondo transaction marks a step further: the first time Kinexys has been linked to a public blockchain in a DvP settlement.

On testnet — for now: While the OUSG transaction was executed on testnet, both Kinexys and Chainlink’s CRE are already in production use. During a joint panel, all three partners described the setup as a blueprint for future integrations.

  • Expansion: Kinexys signaled plans to extend the model to additional public chains, while Chainlink’s Sergey Nazarov noted that CRE is already enabling similar DvP workflows across tokenized funds, real-world assets, and bank-linked payment rails — with more integrations to follow.

Bringing JPMorgan’s Kinexys into the public chain arena does more than tick the “first‑of‑its‑kind” box. It lets JPMorgan clients route cash‑on‑deposit straight into tokenised Treasuries in one atomic swap—no stablecoin detour, no wire leg, and 24/7. That turns Kinexys into an institutional on‑ramp with unrivalled distribution: the bank services thousands of corporates and touches 90 % of Fortune 500 firms, giving Ondo — and any issuer that follows — access to demand that crypto‑native rails have never reached.

The knock‑on effect could reshape onchain settlement itself. By enabling programmable bank deposits to interact directly with public chain assets, Kinexys adds a powerful new settlement option alongside stablecoins – hinting at a future of digital payments that’s stitched together from banks, blockchains, and bespoke rails.

REGULATION

Tokenization Takes Center Stage at SEC Roundtable

TradFi meets DeFi: This week, the SEC hosted a high-level roundtable on tokenization — titled “Moving Assets Onchain: Where TradFi and DeFi Meet” — bringing together representatives from major institutions and crypto-native companies. The discussion centered on tokenized assets and how public blockchains intersect with traditional market infrastructure.

What was said: In his opening remarks, Atkins dubbed blockchain securities “a new file format for capital markets” and set three regulatory targets:

  • Issuance: adapt existing disclosure rules to better fit tokenized offerings

  • Custody: permit advisers and funds to self‑custody eligible crypto assets

  • Trading: update ATS and broker-dealer rules to support integrated trading of tokenized and traditional assets

Commissioner views diverge: While Commissioner Peirce suggested that tokenized securities be treated like traditional ones, regardless of whether they live on a blockchain, Commissioner Caroline Crenshaw warned that public blockchains aren’t proven at scale. She questioned the benefits of instant settlement, arguing it could disrupt netting, liquidity, and retail protections.

Industry perspectives: After the SEC commissioners’ statements, participants took turns laying out why they care about tokenization.

  • Franklin Templeton framed tokenization as a structural upgrade, not just a new asset wrapper — one that embeds legal, regulatory, and transfer logic directly into the instrument.

  • Apollo highlighted the benefits of cross-chain composability and broader access to traditionally illiquid markets.

  • DTCC pointed to the potential for streamlining legacy infrastructure, but stressed that “technical interoperability means little without regulatory alignment”.

The common denominator: While the use cases varied, participants consistently framed tokenization as more than just a tool for efficiency — but as a path to rethinking how capital markets are structured, accessed, and operated.

What’s next: No concrete timeline for rule proposals has been published yet. A second roundtable, focused on DeFi, is scheduled for June 9 and will offer further insight into the Commission’s evolving approach to crypto market structure.

Bringing Apollo, BlackRock, and Franklin Templeton to the same table as crypto founders signals a clear shift in the U.S.: from defense to design. The new goal isn’t to keep tokenized assets out — it’s to build the rules that let them clear, settle, and generate yield on public chains without pushing the industry offshore.

That stands in sharp contrast to Europe. On paper, the EU leads — with regulatory clarity and sandbox regimes — but in practice, adoption has lagged. While European players are still piloting on permissioned infrastructure, U.S. asset managers are already launching tokenized funds live on public blockchains.

True, asset managers face fewer constraints than banks. But the strategic direction is set. In Washington, the question is no longer if public infrastructure can be used — it’s how. If Europe doesn’t recalibrate fast, it won’t be outpaced by regulation, but by execution.

JOB BOARD

A message from Jody Mettler, COO of BitGo, after their newly granted MiCA license.

  1. Blockchain technology rewires capital markets — In a new paper, Austin Campbell and co-author TuongVy Le argue that blockchains offer a cleaner, more resilient alternative to today’s rent-heavy, intermediary-filled market infrastructure.

  2. Europe needs a euro stablecoin strategy — Investor and former French Treasury official Nicolas Colin and fintech leader Marieke Flament argue it’s a matter of sovereignty in a dollar-dominated digital economy.

  3. Why blockchains reject fractional reserves — A new report by Patrick Heusser, Head of Lending at Sentora, explains how capital inefficiency in DeFi is a structural feature, not a flaw — and what it means for the future of on-chain finance.

Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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