DBS, a Singapore-based lender, and Kinexys by J.P. Morgan are collaborating to develop an interoperability framework that enables the seamless transfer of tokenized value between their respective on-chain ecosystems, DBS Token Services and Kinexys Digital Payments. The framework aims to facilitate the exchangeability and settlement of tokenized deposits across both public and permissioned blockchains, setting a new standard for the industry. This collaboration will allow clients to conduct cross-bank transactions on-chain, providing them with broader reach and enabling real-time, 24/7 payments across borders.
The proposed framework will establish interoperability highways between the two banks, spanning both public and permissioned blockchain environments. This will enable J.P. Morgan institutional clients to pay DBS institutional clients using J.P. Morgan Deposit Tokens (JPMD) on the Base public blockchain, with the recipient able to exchange or redeem it for equivalent value via DBS Token Services. The goal is to ensure that tokenized deposits across banks and blockchains are fungible and represent the same value, upholding the principle of the singleness of money.
According to Rachel Chew, Group Chief Operating Officer and Head of Digital Currencies at DBS Bank, instant 24/7 payments provide businesses with the optionality, agility, and speed to navigate global uncertainties and capture emerging opportunities. She emphasized that interoperability is critical in reducing fragmentation and ensuring the safe transfer of tokenized money across borders. Naveen Mallela, Global Co-Head of Kinexys by J.P. Morgan, added that the collaboration is an example of how financial institutions can work together to further the benefits of tokenized deposits for institutional clients while protecting the singleness of money and ensuring interoperability across markets.
The initiative comes amidst accelerated growth in the world of tokenized finance, with commercial banks in nearly one-third of surveyed jurisdictions having launched, piloted, or conducted research on tokenized deposits, according to a 2024 survey by the Bank for International Settlements. Through this collaboration, DBS and Kinexys by J.P. Morgan aim to advance the usability and scalability of tokenized deposits, transforming how global businesses manage their finances while ensuring robust regulatory adherence. The partnership has the potential to pave the way for future collaborations and scale the next generation of financial services for clients.