🎙️ Onyx's Tyrone Lobban Takes Us Behind the Scenes of JP Morgan's First DeFi Trade
This week on The Defiant Podcast we speak with Tyrone Lobban, the head of blockchain at JPMorgan’s Onyx, a business unit focused on digital assets.
In the craziness of the past couple weeks, it’s easy to overlook or forget good news and positive developments. JP Morgan recently made history by becoming the first major bank to execute a live DeFi trade. The trade involved tokenized forex and government bonds and it all happened on the Polygon blockchain.
In our conversation, we dive into the details of the trade and discuss the implications of major banks like JP Morgan and the rest of TradFi using DeFi, and start by getting a better understanding of Onyx.
JP Morgan’s first DeFi transaction took place on 2 November 2022 and was facilitated by Project Guardian, a pilot initiative of the Monetary Authority of Singapore. The trade had a lot of moving pieces and was rather complex. Tyrone takes us behind the scenes and walks us through the steps taken to ensure adherence to KYC/AML standards.
Due to regulatory and privacy concerns, JPMorgan is currently running its DeFi experiments on a permissioned sidechain. We discuss the likelihood of a shift from private infrastructure to a public blockchain.
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What follows is a summary of the podcast episode.
So you are Head of Blockchain at JP Morgan's Onyx business unit. What exactly does Onyx do?
Onyx is JP Morgan's blockchain-focused business unit. What that really means is we have a group of people, somewhere around 250 people, that are exclusively focused on building new infrastructure and new applications, new solutions, that leverage blockchain technology.
The JP Morgan blockchain program started in late 2015. Since then, we've been trying to figure out where blockchain makes sense for a large, regulated financial institution and how we can use this technology not just for ourselves but also for our clients.
The things that we've really been focused on are how do we create better-operating models, better processes, but I think most interestingly, new products. New revenue streams for our clients and for our own internal businesses.
Since we actually began the blockchain program at JP Morgan, we identified three key areas that basically had enough confidence to build this business around.
The three key areas are:
Being able to exchange information related to payments in a better way and deliver new insights off the back of that, once you have a shared ledger of payments information.
Transfer of value. Specifically, money.
The idea of tokenization of traditional assets. Bringing them into blockchain, and creating new products.
I think that all of this is wrapped up in a way that is obviously very focused on blockchain. And especially in the last couple of years, we've been thinking a lot about Web3. How do we create better solutions around identity? How do we interact with public blockchains? What are the DeFi opportunities? This is a very important way for us to look at these three different opportunities that we're really focusing on.
Maybe earlier on, JP Morgan was using more of a private blockchain solution and that's been the direction that most institutions and traditional financial services take when looking at blockchain. It's really notable that you have shifted towards a more public blockchain approach. When did this happen? Was this just a deliberate decision?
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