DBS, JPMorgan to develop interoperability framework for tokenized deposits
Singapore's DBS and Kinexys by J.P. Morgan are developing an interoperability framework to facilitate tokenized deposit transfers between their onchain ecosystems.
This collaboration seeks to create an interoperability layer between the two to allow transactions across both public and permissioned networks, which expands access for clients. Both institutions currently offer clients with round-the-clock liquidity and real-time payment settlement in their respective blockchain-based systems.
According to the press release, clients using JPM Deposit Tokens — built on Ethereum Layer 2 Base — could potentially transact with those on DBS Token Services, which runs on a permissioned blockchain. Such interactions have traditionally been difficult due to limited native interoperability and associated security risks.
"Working with DBS on this initiative is a clear example of how financial institutions can collaborate to further the benefits of tokenized deposits for institutional clients while protecting the singleness of money and ensuring interoperability across markets," said Naveen Mallela, global co-head of Kinexys.
Tokenization has become a major venture among global financial institutions in recent years.
Last month, BNY Mellon, the world's largest custodian by assets under custody, is reportedly exploring tokenized deposit services that would allow clients to make payments over blockchain rails.
Several major UK lenders, including Barclays, Lloyds and HSBC, also announced they are launching a live pilot of tokenized sterling deposits, following encouragement from Bank of England Governor Andrew Bailey.
According to a 2024 report by BIS, commercial banks in nearly one third of surveyed jurisdictions have launched, piloted or conducted research on tokenized deposits.
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