Singapore-based lender DBS and Kinexys by J.P. Morgan are exploring the development of an interoperability framework to enable tokenized value transfers between both banks’ on-chain ecosystems – DBS Token Services and Kinexys Digital Payments.
DBS said in a statement on Tuesday that the framework aims to enable the seamless exchangeability and settlement of tokenized deposits across both public and permissioned blockchains, with the aim to set a new standard for the industry.
Both banks currently offer clients 24/7 liquidity and real-time settlement of payments within their individual ecosystems via their respective blockchain-powered banking services.
This landmark collaboration serves to further scale these services.
The framework, upon completion, will establish interoperability highways between the two banks, spanning both public and permissioned blockchain environments, providing clients with broader reach by enabling cross-bank transactions on-chain.
This will potentially allow the combined institutional client base of Southeast Asia’s and the United States’ largest bank respectively to pay each other, and exchange or redeem their tokenized deposits across either banks’ platform, across borders with real-time round-the-clock availability.
For example, a J.P. Morgan institutional client would be able to pay a DBS institutional client using J.P. Morgan Deposit Tokens (JPMD) on the Base public blockchain, with the recipient having the ability to exchange or redeem it for equivalent value via DBS Token Services.
This aims to uphold the singleness of money, where tokenized deposits across banks and blockchains are fungible and represent the same value, a key principle that is imperative in an increasingly multi-chain, multi-issuer world.
“Instant 24/7 payments provide businesses with the optionality, agility and speed to navigate global uncertainties and capture emerging opportunities,
“As the digital asset ecosystem continues to grow, interoperability remains a critical piece in reducing fragmentation and ensuring that the full value of tokenized money can be transferred safely across borders,” said Rachel Chew, Group Chief Operating Officer and Head of Digital Currencies, Global Transaction Services, DBS Bank.
“Our collaboration with Kinexys by J.P. Morgan to develop an interoperability framework is therefore a significant milestone for cross-border money movement, with the potential to pave the way for future partnerships,
“We look forward to leveraging our combined capabilities to scale the next generation of financial services for our clients,” she added.
Naveen Mallela, Global Co-Head of Kinexys by J.P. Morgan, said they are relentlessly focused on building the next-generation financial infrastructure, backed by deep industry expertise and strong collaborations across the globe.
“Working with DBS on this initiative is a clear example of how financial institutions can collaborate to further the benefits of tokenized deposits for institutional clients while protecting the singleness of money and ensuring interoperability across markets,” he added.
The initiative comes amidst an accelerated growth in the world of tokenized finance.
In a 2024 survey by the Bank for International Settlements, commercial banks in nearly one third of surveyed jurisdictions have launched, piloted or conducted research on tokenized deposits.
Through this collaboration on a cross-issuer cross-network interoperability framework, DBS and Kinexys by J.P. Morgan are committed to advancing the usability and scalability of tokenized deposits, transforming how global businesses manage their finances, while ensuring robust regulatory adherence.