In a significant step toward integrating blockchain into mainstream finance, JPMorgan has tokenized and executed a transaction with a private equity fund on its in-house platform. This move precedes the full rollout of its Kinexy’s Fund Flow, a dedicated tokenization platform the bank plans to launch next year.

JPMorgan’s ambitions extend beyond private equity. The bank intends to tokenize a range of other alternative assets, including private credit, real estate, and hedge funds. It is also exploring innovative use cases, such as allowing clients to use fund tokens as collateral for borrowing or to construct diversified portfolios of tokenized assets. The specific fund involved in the initial transaction was not disclosed.

Anton Pil, head of JPMorgan’s global alternative investment solutions, explained that enabling real-time, tri-party settlement will ultimately unlock new sources of liquidity and allow for more flexible portfolio construction.

Wall Street’s Broader Push into Blockchain

JPMorgan’s initiative is part of a much larger trend across the financial industry. While prominent figures like CEO Jamie Dimon have expressed skepticism about cryptocurrencies, their institutions have consistently seen opportunity in the underlying blockchain technology. The focus is on tokenizing real-world and financial assets to make trading faster, cheaper, and more efficient.

This industry-wide shift is underscored by several other major projects. Nearly a dozen major banks are jointly exploring the issuance of a stablecoin pegged to G7 currencies. In a similar vein, Goldman Sachs and BNY Mellon recently announced a partnership to tokenize money market funds managed by firms including BlackRock and Fidelity.

Europe Sets the Pace in Tokenized Securities

While the United States is developing a regulatory framework for stablecoins through proposals like the GENIUS Act, Europe has taken a lead in certain areas of digital asset trading. Last month, France’s Lise Exchange became the first European platform authorized to trade and settle listed shares entirely on a blockchain.

Just this week, Switzerland’s BX Digital partnered with the New York-based Ondo Finance to launch tokenized versions of stocks and Exchange-Traded Funds (ETFs). This initiative will allow these digital securities to be traded 24/7 on the BX platform, further blurring the lines between traditional and decentralized finance.