JPMorgan plans to incorporate tokenized assets to DeFi
"Decentralized finance and blockchain are real, new technologies that can be deployed in both public and private fashion, permissioned or not," that's what Jamie Dimon, JPMorgan's Chairman and CEO, wrote in his most recent letter to shareholders in April.
JPMorgan is one of the biggest names to have embraced crypto adoption early on and is fueling the mainstream adoption of crypto and DeFi. Dimon stated at a remote New York Times summit in November 2020 that blockchain technology is a "critical" development in the way money is handled.
Despite his favorable impressions of blockchain technology, he remained skeptical of Bitcoin. He backpedaled on Bitcoin in October 2021, declaring it worthless. "I personally think Bitcoin is worthless," he said at the Institute of International Finance's annual meeting.
JP Morgan focused on the yield-generating potential of non-crypto assets. According to a Bloomberg report last month, the bank is testing the use of its own private blockchain for collateral settlements, and on May 20, two of its entities transferred a tokenized representation of Black Rock Inc. money market fund shares.
According to the latest reports, Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, detailed the bank's institutional-grade DeFi plans at Consensus 2022 in Austin, Texas, and highlighted how much value is waiting in the wings in tokenized assets.
"Over time, we think tokenizing U.S. Treasurys or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools," Lobban said. "The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets."
According to Lobban, JPMorgan's plans incorporating tokenization of traditional assets see two complementary parts to bringing bank-grade DeFi to a successful conclusion.
The first component is the blockchain-based collateral settlement system, and the second component is a recent pilot dubbed "Project Guardian," which is led by the Monetary Authority of Singapore and includes JPMorgan, DBS Bank, and Marketnode. It puts institutional-friendly DeFi to the test by using permissioned liquidity pools made up of tokenized bonds and deposits.
What is asset tokenization?
Asset tokenization is the process by which an issuer creates digital tokens that represent either digital or physical assets on a blockchain. The opportunities are endless as tokenization allows for both fractional ownership and proof-of-ownership.
Companies around the world use blockchain technology to tokenize almost anything, from traditional assets like venture capital funds, bonds, commodities, and real-estate properties to exotic assets like sports teams and artworks. You will not be able to access DeFi by owning real-world assets or equity. These assets, however, can be effectively integrated when tokenized in full legal compliance.
Institutional DeFi entails imposing know-your-customer (KYC) requirements on crypto's permissionless lending pools. The biggest challenges for DeFi so far have been accessibility and the KYC-free structure, particularly for the traditional finance branch, as well as a lack of liquidity as real-world assets are rarely integrated. Tokenized equity and assets can bridge the gap and provide liquidity. DeFi and tokenization together reshape the financial system by transforming DeFi into a real-world application.
Mastercard allows its cardholders to purchase NFTs on a variety of platforms.
You might soon be able to buy nfts with your debit/credit MasterCard on platforms like immutableX and Sandbox. The payments giant is partnering with multiple NFT platforms, including Candy Digital, Mintable, Spring and Nifty Gateway, and Web3 infrastructure provider MoonPay to make purchases without using any cryptocurrencies.
Mastercard has approximately 2.9 billion cards in circulation worldwide, and steps like these might significantly influence the NFT ecosystem. The payments company said it would focus on consumer safety and data protection throughout the process of buying an NFT.
"We're working with these companies to allow people to use their Mastercard cards for NFTs purchases, whether on one of these companies' NFT marketplaces or using their crypto services," Raj Dhamodharan said, Executive Vice President of Digital Asset Blockchain Products & Partnerships at Mastercard.
In a blog post, Mastercard said that in 2021, the above-mentioned NFT marketplaces will have produced over $25 billion in sales, ranging from art to sports to video games to collectibles to metaverse platforms. Also, in a recent survey, 35,000 people from 40 nations were asked about NFTs. It was revealed that 45 per cent had already purchased an NFT or considered purchasing one. The majority of people sought more flexibility and wanted to be able to pay with crypto for everyday purchases or purchase NFTs with a credit or debit card. As a result, it's possible that the company is creating what its customers desire.
Creators of Barbie and Hotwheels are collaborating with an NFT marketplace.
Mattel, a major toy company, has secured a multi-year deal with Cryptoys, an emerging toy-focused nonfungible token (NFT) marketplace, to feature its brands exclusively on the platform.
The NFT platform, developed in collaboration with OnChain Studios, is launching in late summer 2022 on the Flow blockchain. Cryptoys metaverse and other play-to-earn games starring characters from Barbie, Hot Wheels, and Masters of the Universe, among others, are planned by the firm.
"We see incredible opportunity in the metaverse for our cherished brands and iconic IP," Mattel President and COO Richard Dickson said in a statement.
Mattel has previously experimented with NFTs, collaborating with the WAX blockchain to issue a series of Hot Wheels NFTs in October 2021. It has also auctioned three one-of-a-kinds NFTs in cooperation with French luxury brand Balmain in January 2022, netting the companies over $49,000 for all three. Hasbro, which owns brands like Action Man, My Little Pony, and G.I. Joe, debuted its first NFT collection for its Power Rangers brand in October 2021 to compete in the NFT industry.