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The price of bitcoin has crashed over the past year, dropping from an all-time high of nearly $70,000 per bitcoin to around $20,000. The bitcoin price crash dragged down the broader crypto market, wiping out around $2 trillion in notional value.
Today, JPMorgan, one of Wall Street’s biggest banks led by outspoken bitcoin and crypto-skeptic Jamie Dimon, completed its first-ever cross-border transaction using blockchain-based decentralized finance (DeFi) in what has been called “a massive milestone” for the crypto space.
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This week, JPMorgan completed its first live cross-border transaction on a public blockchain using the Ethereum Polygon layer two network.
JPMorgan’s FX trading for tokenized cash deposits, using the bank’s blockchain division for wholesale payments Onyx, has been facilitated by the Monetary Authority of Singapore (MAS) as part of a pilot program for ” explore potential DeFi applications in wholesale funding markets”.
Developers of the DeFi lending protocol aave job to Twitter that the pilot is a “significant milestone” for the technology, representing “a massive step towards the transition from traditional financial assets to DeFi”.
“Crypto enthusiasts have never doubted that innovation coming out of this space – especially innovation in DeFi – has the potential to make international banking cheaper, faster and more efficient,” said Mikkel Morch. , chairman of digital asset hedge fund ARK36, in an email. comments. “Now traditional finance giants are starting to confirm this by using DeFi protocols as a viable solution to streamline international monetary trade.”
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JPMorgan’s interest in crypto, blockchain and DeFi is somewhat at odds with the bank’s chief executive, Jamie Dimon, who called crypto a “decentralized Ponzi scheme” in September.
“It’s a little surprising to see JP Morgan at the forefront of this trend given how critical the bank’s CEO has been of the cryptocurrency space. the old adage, actions speak louder than words,” Marcus Sotiriou, analyst at Digital Asset broker GlobalBlock, said in an emailed note.
In the past, cryptocurrencies have sometimes been unfairly labeled as a solution in search of a problem. But make no mistake, seeing a bank like JPMorgan come to use open source solutions developed by cryptocurrency companies is not only a validation of DeFi as a technology, but also a vindication of crypto as a business. ‘industry.