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JPMorgan Chase is making investing in alternative assets easier by offering them through digital tokens.
On 30 October, the banking giant tokenised a private-equity fund on its blockchain platform, available to wealthy clients of its private bank.
The move precedes a broader rollout next year of JPMorgan’s fund tokenisation platform, Kinexys Fund Flow.
Tokenisation provides a digital representation of asset ownership on a blockchain ledger.
Despite past caution toward cryptocurrencies, banks have long recognised blockchain’s potential to streamline operations, according to the Wall Street Journal.
President Trump’s signing of the Genius Act this summer, which created a regulatory framework for tokenised dollars or stablecoins, has spurred efforts to digitise assets ranging from stocks to funds and real assets.
In July, Goldman Sachs and Bank of New York Mellon announced plans to launch digital tokens representing money-market funds managed by major firms including BlackRock and Fidelity.
JPMorgan’s Kinexys Fund Flow platform gathers data from fund managers, distributors, and administrators, generates smart contracts representing fund ownership, and enables near-instant exchange of cash and assets on the blockchain.
“For the alternative investments industry, it’s just a matter of time that a blockchain-based solution is going to be adopted,”
said Anton Pil, Head of Global Alternative Investment Solutions for JPMorgan’s asset management arm.
“It’s more about simplifying the ecosystem of alternatives and making it, frankly, a little easier to access for most investors.”
A tokenised fund allows all parties to share a single, real-time view of ownership and contributions, reducing surprises from capital calls, requests by private fund managers for investors to provide committed capital on short notice.
JPMorgan plans to expand tokenisation to other alternative strategies, including private credit, real estate, and hedge funds.
The bank is also exploring using fund tokens as collateral for borrowing or constructing portfolios of tokenised assets.
Regulatory restrictions mean banks mainly operate on private blockchain platforms, accessible to selected users in a closed ecosystem.
Read more on Fintech Schweiz Digital Finance News – FintechNewsCH
