JPMorgan to Explore Economic Potential and Use Cases for Cryptocurrencies

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American investment bank JPMorgan will study the economic potential of cryptocurrency will be consideredoptions for their use within the framework of the Central Bank of Singapore's "Project Guardian" project.

To do this, JPMorgan Chase & Co has teamed up with Singapore-based DBS Bank Ltd and digital market infrastructure operator Marketnode.The project will explore the possibility of tokenizing assets and DeFi using open, interoperable networks.This is expected to allow crypto assets to be traded across platforms, including the pre-existing financial infrastructure. 

Companies will also explore institutional-grade DeFi protocols to combat market manipulation and risk.The first industry trial under Project Guardian involves the use of tokenized bonds and deposits in a permissioned liquidity pool for DeFi applications built to borrow and lend on the public network.

Sopnendu Mohanty, Director of Financial Technology at the Monetary Authority of Singapore (MAS), said that tokenization has the potential toincrease the availability of financial services, as well as increase liquidity in financial markets.

DBS Bank, JPMorgan and Temasek, co-owner of Marketnode, are also participating in a separate trial of Singapore's interbank payment system on the Partior blockchain.The enterprise platform is aimed at increasing the speed and reducing the cost of cross-border payments.

JPMorgan previously announced the launch of a pilot project using blockchain to calculate collateral for loans and borrowings.