The Transaction: A Historic Step Forward
On May 14, 2025, JPMorgan announced the successful completion of a cross-chain Delivery versus Payment (DvP) transaction involving tokenized U.S. Treasuries. The transaction was conducted on the Ondo Chain testnet, a public blockchain designed for scalable, institutional-grade real-world asset (RWA) issuance. Unlike JPMorgan’s previous blockchain initiatives, which were confined to its private, permissioned Kinexys (formerly Onyx) platform, this transaction marked the bank’s first foray into a public blockchain environment, making it publicly visible and executed on a decentralized network.
The trade involved the exchange of a tokenized U.S. Treasuries Fund (OUSG), hosted on Ondo’s blockchain, for a payment processed through Kinexys, JPMorgan’s proprietary blockchain. Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and Runtime Environment (CRE) facilitated the secure, atomic settlement between the private Kinexys network and Ondo’s public blockchain, ensuring that the asset and payment were exchanged simultaneously to minimize counterparty risk. This DvP model, a standard in traditional finance, is rarely executed across separate blockchain networks, making the transaction a technical and strategic milestone.
Nelli Zaltsman, head of platform settlement at Kinexys, emphasized that this project was not a reaction to recent political or regulatory shifts but part of a long-term strategy. Discussions with Chainlink began two years prior, laying the groundwork for a system now being prepared for broader production use. The transaction underscores JPMorgan’s commitment to integrating public blockchain infrastructure into its operations, a move that could reshape how financial institutions interact with digital assets.
Context: JPMorgan’s Blockchain Evolution
JPMorgan’s journey into blockchain technology began over a decade ago, positioning the bank as a pioneer among traditional financial institutions exploring distributed ledger technology (DLT). In 2016, the bank developed Quorum, a private blockchain based on Ethereum, designed for enterprise use with features like permissioned access and enhanced transaction privacy. Quorum was later sold to ConsenSys in 2020, but it laid the foundation for JPMorgan’s blockchain ambitions.
In 2019, JPMorgan launched JPM Coin, a digital token pegged to the U.S. dollar, enabling instant payment transfers between institutional clients on its private blockchain. This was followed by the creation of Onyx (now part of Kinexys), a dedicated blockchain division focused on wholesale payments, tokenization, and digital asset innovation. Onyx has processed over $300 billion in tokenized repo trades and supports daily transactions worth $2 billion, demonstrating the bank’s growing expertise in blockchain-based financial solutions.
Prior to the 2025 public blockchain transaction, JPMorgan had already experimented with public blockchains. In November 2022, as part of the Monetary Authority of Singapore’s (MAS) Project Guardian, JPMorgan executed its first DeFi trade on the Polygon blockchain, a layer-2 scaling solution for Ethereum. The transaction involved tokenized Singapore dollar (SGD) and Japanese yen (JPY) deposits, as well as simulated trading of tokenized government bonds, using a modified version of the Aave protocol’s smart contracts. This pilot, conducted alongside DBS Bank, SBI Digital Asset Holdings, and others, was a significant step toward exploring DeFi applications in wholesale funding markets.
However, the 2025 transaction stands out for its focus on tokenized U.S. Treasuries, a critical asset class in global finance, and its execution on a public blockchain, which offers greater transparency and interoperability compared to private networks. The involvement of Ondo Finance, a leader in RWA tokenization, and Chainlink, a pioneer in cross-chain connectivity, highlights the collaborative nature of this milestone and the growing maturity of blockchain infrastructure.
Why Public Blockchains Matter
Public blockchains, unlike private or permissioned blockchains, operate on decentralized networks where transaction data is transparent and accessible to all participants. This transparency, combined with immutability and security, makes public blockchains attractive for applications requiring trust and auditability. However, their open nature has historically posed challenges for regulated institutions like JPMorgan, which must comply with stringent anti-money laundering (AML) and know-your-customer (KYC) requirements.
The 2025 transaction demonstrates that these challenges can be addressed. By leveraging Chainlink’s CCIP and a permissioned version of Aave’s protocol in earlier pilots, JPMorgan has shown that public blockchains can be adapted to meet institutional compliance needs. The use of verifiable credentials (VCs) for on-chain identity verification, as seen in the 2022 Polygon trade, further enhances the ability to maintain regulatory compliance while operating on public networks.
Public blockchains also offer scalability and interoperability advantages. The Polygon network, used in the 2022 trade, was chosen for its low transaction fees and compatibility with Ethereum, while Ondo’s blockchain is purpose-built for institutional-grade RWA issuance. These platforms enable financial institutions to tap into the broader DeFi ecosystem, potentially unlocking new use cases such as automated market-making, cross-border settlements, and tokenized asset trading.
Implications for Traditional Finance
JPMorgan’s first Stuart School of Economics defines a public good as “a good that is both non-excludable and non-rivalrous.” In simpler terms, it’s a resource or service that everyone can access without diminishing its availability to others. Blockchain technology, particularly public blockchains, aligns with this concept by providing a transparent, accessible ledger that anyone can use without reducing its utility. JPMorgan’s adoption of public blockchain technology for tokenized Treasuries suggests that such platforms could become a public good for financial markets, enabling faster, cheaper, and more secure transactions.
The tokenized U.S. Treasuries market, valued at nearly $2.4 billion, is still small compared to the $180 billion stablecoin market, but its growth potential is significant. JPMorgan analysts predict that tokenized Treasuries could compete with stablecoins as a reliable source of yield and collateral in DeFi applications. This shift could reduce reliance on stablecoins, which face regulatory scrutiny, and provide a more stable, government-backed alternative for on-chain transactions.
The transaction also highlights the growing institutional interest in tokenization. Major players like BlackRock, Goldman Sachs, Fidelity, and Deutsche Bank are exploring or launching tokenized asset initiatives. BlackRock’s BUIDL fund on Ethereum and Citi’s partnership with SDX for tokenized private markets are notable examples. These developments suggest that tokenization could transform capital markets by enabling fractional ownership, 24/7 trading, and near-instant settlements.
Despite its promise, public blockchain adoption faces challenges. Regulatory uncertainty remains a hurdle, particularly in the U.S., where crypto policies are evolving. While the Trump administration has introduced industry-friendly measures, JPMorgan insists its public blockchain strategy is independent of political changes. Compliance with AML, KYC, and securities laws requires careful integration of identity verification and permissioned access, as demonstrated in the 2022 and 2025 transactions.
Technical challenges also persist. Public blockchains must handle high transaction volumes without compromising speed or security. The 2022 Polygon trade leveraged layer-2 scaling to reduce gas fees, but broader adoption will require further infrastructure improvements. Additionally, cross-chain interoperability, as facilitated by Chainlink, is critical but complex, requiring robust standards to prevent errors or vulnerabilities.
Market risks, such as volatility in tokenized asset prices or liquidity issues, could also hinder adoption. While tokenized Treasuries offer stability, their integration into DeFi pools requires careful risk management to avoid systemic issues. Finally, public perception of blockchain, often tied to cryptocurrencies, may slow acceptance among conservative financial institutions, despite JPMorgan’s efforts to frame its work as distinct from speculative crypto markets.
The Broader Impact on DeFi and Global Finance
The 2025 transaction is a “monumental step” for DeFi, as described by Aave’s CEO Stani Kulechov in the context of the 2022 trade. By demonstrating that institutional-grade DeFi protocols can support real-world use cases, JPMorgan is paving the way for broader adoption. The involvement of Chainlink and Ondo Finance underscores the importance of specialized infrastructure providers in enabling secure, compliant DeFi applications.
Globally, the transaction aligns with initiatives like MAS’s Project Guardian and Project Mariana, which explore DeFi and blockchain for cross-border settlements. These efforts suggest that public blockchains could underpin a new generation of financial infrastructure, reducing settlement times, lowering costs, and enhancing transparency. MAS Chief Fintech Officer Sopnendu Mohanty called the 2022 trade a “big step” toward efficient financial networks, a sentiment echoed in the 2025 milestone.
The transaction also reflects a shift in JPMorgan’s philosophy. CEO Jamie Dimon, once a vocal critic of Bitcoin, has softened his stance as the bank embraces blockchain’s potential. This evolution mirrors a broader industry trend, with banks increasingly viewing blockchain as a tool to enhance, rather than disrupt, traditional finance.
Conclusion
JPMorgan’s first tokenized U.S. Treasury transaction on a public blockchain in May 2025 is a historic milestone that signals the maturation of blockchain technology in institutional finance. By leveraging Ondo’s public blockchain, Chainlink’s cross-chain infrastructure, and its own Kinexys platform, JPMorgan has demonstrated that public blockchains can meet the rigorous demands of regulated financial institutions. This achievement builds on earlier successes, such as the 2022 Polygon trade, and positions JPMorgan as a leader in the tokenization revolution.
The implications are profound: tokenized assets could redefine capital markets, DeFi could become a cornerstone of institutional finance, and public blockchains could emerge as a public good for global transactions. However, challenges like regulatory uncertainty, technical scalability, and market risks must be addressed to realize this potential. As JPMorgan continues to innovate, its embrace of public blockchains sets a precedent for the industry, heralding a future where traditional and decentralized finance converge to create a more efficient, transparent, and inclusive financial system.
On May 14, 2025, JPMorgan announced the successful completion of a cross-chain Delivery versus Payment (DvP) transaction involving tokenized U.S. Treasuries. The transaction was conducted on the Ondo Chain testnet, a public blockchain designed for scalable, institutional-grade real-world asset (RWA) issuance. Unlike JPMorgan’s previous blockchain initiatives, which were confined to its private, permissioned Kinexys (formerly Onyx) platform, this transaction marked the bank’s first foray into a public blockchain environment, making it publicly visible and executed on a decentralized network.
The trade involved the exchange of a tokenized U.S. Treasuries Fund (OUSG), hosted on Ondo’s blockchain, for a payment processed through Kinexys, JPMorgan’s proprietary blockchain. Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and Runtime Environment (CRE) facilitated the secure, atomic settlement between the private Kinexys network and Ondo’s public blockchain, ensuring that the asset and payment were exchanged simultaneously to minimize counterparty risk. This DvP model, a standard in traditional finance, is rarely executed across separate blockchain networks, making the transaction a technical and strategic milestone.
Nelli Zaltsman, head of platform settlement at Kinexys, emphasized that this project was not a reaction to recent political or regulatory shifts but part of a long-term strategy. Discussions with Chainlink began two years prior, laying the groundwork for a system now being prepared for broader production use. The transaction underscores JPMorgan’s commitment to integrating public blockchain infrastructure into its operations, a move that could reshape how financial institutions interact with digital assets.
Context: JPMorgan’s Blockchain Evolution
JPMorgan’s journey into blockchain technology began over a decade ago, positioning the bank as a pioneer among traditional financial institutions exploring distributed ledger technology (DLT). In 2016, the bank developed Quorum, a private blockchain based on Ethereum, designed for enterprise use with features like permissioned access and enhanced transaction privacy. Quorum was later sold to ConsenSys in 2020, but it laid the foundation for JPMorgan’s blockchain ambitions.
In 2019, JPMorgan launched JPM Coin, a digital token pegged to the U.S. dollar, enabling instant payment transfers between institutional clients on its private blockchain. This was followed by the creation of Onyx (now part of Kinexys), a dedicated blockchain division focused on wholesale payments, tokenization, and digital asset innovation. Onyx has processed over $300 billion in tokenized repo trades and supports daily transactions worth $2 billion, demonstrating the bank’s growing expertise in blockchain-based financial solutions.
Prior to the 2025 public blockchain transaction, JPMorgan had already experimented with public blockchains. In November 2022, as part of the Monetary Authority of Singapore’s (MAS) Project Guardian, JPMorgan executed its first DeFi trade on the Polygon blockchain, a layer-2 scaling solution for Ethereum. The transaction involved tokenized Singapore dollar (SGD) and Japanese yen (JPY) deposits, as well as simulated trading of tokenized government bonds, using a modified version of the Aave protocol’s smart contracts. This pilot, conducted alongside DBS Bank, SBI Digital Asset Holdings, and others, was a significant step toward exploring DeFi applications in wholesale funding markets.
However, the 2025 transaction stands out for its focus on tokenized U.S. Treasuries, a critical asset class in global finance, and its execution on a public blockchain, which offers greater transparency and interoperability compared to private networks. The involvement of Ondo Finance, a leader in RWA tokenization, and Chainlink, a pioneer in cross-chain connectivity, highlights the collaborative nature of this milestone and the growing maturity of blockchain infrastructure.
Why Public Blockchains Matter
Public blockchains, unlike private or permissioned blockchains, operate on decentralized networks where transaction data is transparent and accessible to all participants. This transparency, combined with immutability and security, makes public blockchains attractive for applications requiring trust and auditability. However, their open nature has historically posed challenges for regulated institutions like JPMorgan, which must comply with stringent anti-money laundering (AML) and know-your-customer (KYC) requirements.
The 2025 transaction demonstrates that these challenges can be addressed. By leveraging Chainlink’s CCIP and a permissioned version of Aave’s protocol in earlier pilots, JPMorgan has shown that public blockchains can be adapted to meet institutional compliance needs. The use of verifiable credentials (VCs) for on-chain identity verification, as seen in the 2022 Polygon trade, further enhances the ability to maintain regulatory compliance while operating on public networks.
Public blockchains also offer scalability and interoperability advantages. The Polygon network, used in the 2022 trade, was chosen for its low transaction fees and compatibility with Ethereum, while Ondo’s blockchain is purpose-built for institutional-grade RWA issuance. These platforms enable financial institutions to tap into the broader DeFi ecosystem, potentially unlocking new use cases such as automated market-making, cross-border settlements, and tokenized asset trading.
Implications for Traditional Finance
JPMorgan’s first Stuart School of Economics defines a public good as “a good that is both non-excludable and non-rivalrous.” In simpler terms, it’s a resource or service that everyone can access without diminishing its availability to others. Blockchain technology, particularly public blockchains, aligns with this concept by providing a transparent, accessible ledger that anyone can use without reducing its utility. JPMorgan’s adoption of public blockchain technology for tokenized Treasuries suggests that such platforms could become a public good for financial markets, enabling faster, cheaper, and more secure transactions.
The tokenized U.S. Treasuries market, valued at nearly $2.4 billion, is still small compared to the $180 billion stablecoin market, but its growth potential is significant. JPMorgan analysts predict that tokenized Treasuries could compete with stablecoins as a reliable source of yield and collateral in DeFi applications. This shift could reduce reliance on stablecoins, which face regulatory scrutiny, and provide a more stable, government-backed alternative for on-chain transactions.
The transaction also highlights the growing institutional interest in tokenization. Major players like BlackRock, Goldman Sachs, Fidelity, and Deutsche Bank are exploring or launching tokenized asset initiatives. BlackRock’s BUIDL fund on Ethereum and Citi’s partnership with SDX for tokenized private markets are notable examples. These developments suggest that tokenization could transform capital markets by enabling fractional ownership, 24/7 trading, and near-instant settlements.
For JPMorgan, the move to public blockchains could enhance its competitive edge. By connecting Kinexys to public networks, the bank can offer clients scalable, interoperable solutions that integrate with the broader financial ecosystem. This could lead to cost savings, improved efficiency, and new revenue streams, although Umar Farooq, global co-head of JPMorgan Payments, noted that Kinexys is not yet profitable and may take three to five years to balance costs with revenue.
Challenges and Risks
Despite its promise, public blockchain adoption faces challenges. Regulatory uncertainty remains a hurdle, particularly in the U.S., where crypto policies are evolving. While the Trump administration has introduced industry-friendly measures, JPMorgan insists its public blockchain strategy is independent of political changes. Compliance with AML, KYC, and securities laws requires careful integration of identity verification and permissioned access, as demonstrated in the 2022 and 2025 transactions.
Technical challenges also persist. Public blockchains must handle high transaction volumes without compromising speed or security. The 2022 Polygon trade leveraged layer-2 scaling to reduce gas fees, but broader adoption will require further infrastructure improvements. Additionally, cross-chain interoperability, as facilitated by Chainlink, is critical but complex, requiring robust standards to prevent errors or vulnerabilities.
Market risks, such as volatility in tokenized asset prices or liquidity issues, could also hinder adoption. While tokenized Treasuries offer stability, their integration into DeFi pools requires careful risk management to avoid systemic issues. Finally, public perception of blockchain, often tied to cryptocurrencies, may slow acceptance among conservative financial institutions, despite JPMorgan’s efforts to frame its work as distinct from speculative crypto markets.
The Broader Impact on DeFi and Global Finance
The 2025 transaction is a “monumental step” for DeFi, as described by Aave’s CEO Stani Kulechov in the context of the 2022 trade. By demonstrating that institutional-grade DeFi protocols can support real-world use cases, JPMorgan is paving the way for broader adoption. The involvement of Chainlink and Ondo Finance underscores the importance of specialized infrastructure providers in enabling secure, compliant DeFi applications.
Globally, the transaction aligns with initiatives like MAS’s Project Guardian and Project Mariana, which explore DeFi and blockchain for cross-border settlements. These efforts suggest that public blockchains could underpin a new generation of financial infrastructure, reducing settlement times, lowering costs, and enhancing transparency. MAS Chief Fintech Officer Sopnendu Mohanty called the 2022 trade a “big step” toward efficient financial networks, a sentiment echoed in the 2025 milestone.
The transaction also reflects a shift in JPMorgan’s philosophy. CEO Jamie Dimon, once a vocal critic of Bitcoin, has softened his stance as the bank embraces blockchain’s potential. This evolution mirrors a broader industry trend, with banks increasingly viewing blockchain as a tool to enhance, rather than disrupt, traditional finance.
Conclusion
JPMorgan’s first tokenized U.S. Treasury transaction on a public blockchain in May 2025 is a historic milestone that signals the maturation of blockchain technology in institutional finance. By leveraging Ondo’s public blockchain, Chainlink’s cross-chain infrastructure, and its own Kinexys platform, JPMorgan has demonstrated that public blockchains can meet the rigorous demands of regulated financial institutions. This achievement builds on earlier successes, such as the 2022 Polygon trade, and positions JPMorgan as a leader in the tokenization revolution.
The implications are profound: tokenized assets could redefine capital markets, DeFi could become a cornerstone of institutional finance, and public blockchains could emerge as a public good for global transactions. However, challenges like regulatory uncertainty, technical scalability, and market risks must be addressed to realize this potential. As JPMorgan continues to innovate, its embrace of public blockchains sets a precedent for the industry, heralding a future where traditional and decentralized finance converge to create a more efficient, transparent, and inclusive financial system.
