JPMorgan Chase points out that Wall Street giants are tokenizing real-world assets (RWA) at an unprecedented pace and integrating them into core financial operations. This is primarily manifested in three frontier areas: money market funds tailored for stablecoins, blockchain-based intraday repo transactions, and fully digitized commercial paper issuance.
The convergence of traditional finance and digital assets is no longer a distant vision but a structural transformation that is currently underway.
According to JPMorgan Chase's latest research from August 27, Wall Street giants are tokenizing real-world assets (RWA) at an unprecedented speed and integrating them into core financial operations.
This is primarily reflected in three frontier areas: money market funds tailored for stablecoins, blockchain-based intraday repo transactions, and fully digitized commercial paper issuance.
JPMorgan Chase believes these innovations have the potential to enhance trading efficiency, reduce costs, and provide better liquidity management. However, the development of regulatory frameworks still requires time, with the CLARITY Act expected to be formally passed only by early 2026.
**Stablecoin Reserve Funds: Digital Transformation of Traditional Money Funds**
Traditional financial institutions are actively embracing the stablecoin market, viewing it as a key bridge connecting the digital and real worlds.
The report indicates that Bank of New York Mellon is preparing to launch a money market fund focused on stablecoin reserves, becoming the third asset management giant to enter this field after BlackRock and Goldman Sachs.
Last week, Goldman Sachs filed an application for a stablecoin reserve fund, while BlackRock launched the Circle Reserve Fund as early as late 2022. These fund shares are intended to be held by stablecoin issuers as reserve support for their circulating payment stablecoins.
According to filings submitted to the U.S. Securities and Exchange Commission, this money fund named "BNY Dreyfus Stablecoin Reserves Fund" primarily targets stablecoin issuers for use as reserve assets for their stablecoins.
The fund is classified as a government money fund, with investments strictly limited to U.S. Treasury securities, Treasury repos, and cash.
In SEC filings, Bank of New York Mellon stated that "because the fund intends to invest only in certain eligible reserve assets that comply with stablecoin legislation, the fund's yield may be lower than other money funds that are permitted to invest in a broader range of investments with longer maturities."
**Blockchain-Enabled Intraday Repos: 24/7 Trading Becomes Reality**
Liquidity management is at the core of financial markets. The report highlights two breakthrough developments utilizing blockchain technology to revolutionize the repo market, aimed at meeting liquidity demands outside regular market trading hours.
The first case involves a standard repo transaction completed through the Tradeweb platform on Canton Network, a public blockchain, with the entire process occurring on a Saturday.
The transaction tokenized U.S. Treasury securities held at a DTCC subsidiary and used them as collateral to borrow Circle Internet Corp.'s stablecoin USDC.
The entire transaction was completed instantly on-chain without requiring dealers as intermediaries, achieving instant settlement unattainable in traditional markets. Multiple institutions, including Bank of America and Citadel, participated, highlighting the tremendous potential for cross-institutional collaboration with this technology.
The second case involves collaboration between JPMorgan Chase, HQLAx, and Ownera.
They launched a cross-ledger repo solution that allows traders to exchange between JPMorgan Chase's cash ledger and HQLAx's collateral ledger, with settlement and maturity times precise to the minute.
This provides institutions with a new efficient tool for optimizing intraday liquidity, far exceeding the settlement efficiency of traditional repo transactions.
**Commercial Paper's Blockchain Revolution: Full Lifecycle Digitization**
Blockchain applications have penetrated deep into the core processes of traditional debt instruments.
The report reveals that Oversea-Chinese Banking Corporation issued $100 million in U.S. commercial paper through JPMorgan Chase's digital debt services, becoming the first bank to issue commercial paper using blockchain throughout its entire lifecycle (issuance, settlement, servicing, and record-keeping).
State Street Bank purchased all the paper and became the first third-party custodian to go live on the digital debt service.
By leveraging blockchain, these processes can become more efficient and transparent, while also bringing additional benefits such as faster settlement times.
JPMorgan Chase notes that the intersection of digital assets and traditional finance is just the beginning, but large-scale adoption still requires time as regulation in this field develops.
The U.S. CLARITY Act is ongoing new legislation aimed at establishing a comprehensive regulatory framework for all digital assets in the market, addressing market structure and jurisdictional ambiguities between the Securities and Exchange Commission and the CFTC.
The bill has passed the House but has not yet passed the Senate and is expected to take longer. JPMorgan Chase anticipates the bill will not reach the U.S. President's office until early 2026.
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