State Street becomes the first third-party custodian to join JP Morgan's blockchain bond platform
Global asset management giant State Street announced on Thursday (8/21) that it has become the first third-party custodian for JP Morgan's Digital Debt Service platform, symbolizing a significant breakthrough for traditional financial institutions in the blockchain bond industry. This custodian bank, established in 1792 and managing assets worth $49 trillion, is deepening its layout in the digital asset industry through this partnership.
In the first transaction, OCBC issued tokenized commercial paper worth $100 million, purchased by State Street Investment Management, with JP Morgan Securities acting as the placement agent. This transaction was executed on JP Morgan's multi-asset tokenization platform 'Kinexys Digital Assets', showcasing the practical application capability of blockchain technology in institutional-grade bond issuance.
Blockchain technology revolutionizes the bond trading process, achieving instant settlement and automated management
The core advantage of this partnership lies in fundamentally reforming the issuance, settlement, and servicing processes of traditional bonds through blockchain technology.
State Street eliminates manual steps in settlement and record keeping by directly connecting its digital wallet to the JP Morgan system for managing customer-held bonds. This infrastructure supports a cash-to-cash settlement mechanism and offers same-day (T+0) settlement options, significantly improving efficiency compared to traditional overnight settlements. The use of smart contracts further automates interest payments, redemptions, and other corporate actions, greatly reducing the demand for manual processing common in the traditional bond market.
State Street product head Donna Milrod stated that this partnership reflects the company's significant progress in digital strategy, 'We are managing digital wallets on-chain and laying the foundation for interoperability between blockchain networks.'
Source: State Street State Street product head Donna Milrod
Institutional investors embrace tokenized assets, rapidly expanding the market size
The RWA market is experiencing explosive growth; according to RWA.xyz data, the industry has grown by about 65% since early 2025, with a market value exceeding $26.57 billion (excluding stablecoins). Predictions for this trend vary greatly among major financial institutions, with McKinsey estimating the market size will reach $2 trillion by 2030, while Ripple and BCG predict it will reach nearly $19 trillion by 2033.
Source: RWA.xyz The market value of the RWA market has exceeded $26.57 billion
JP Morgan launched the blockchain service suite Onyx in 2020 and will rebrand it as the Kinexys RWA tokenization platform in 2024. The platform has established a partnership with Chainlink to jointly develop payment infrastructure for tokenized RWA transactions between financial institutions. Emma Lovett, head of credit for JP Morgan's market digital asset team, noted that State Street's participation as a custodian represents significant progress for institutional investors adopting blockchain bonds.
Accelerated digital transformation of traditional finance, blockchain bonds become a new trend
State Street Investment Management global cash management head Pia McCusker stated that this commercial paper investment showcases the tangible benefits brought by technology for institutional clients.
We successfully invested in the first blockchain-format commercial paper transaction in our short-term investment fund, demonstrating the tangible benefits this technology brings to clients and positioning them at the forefront of the digital transformation in fixed income markets.
This $100 million transaction validates the capability of blockchain technology to handle institutional-grade bond issuance while maintaining the regulatory compliance and security standards expected in the traditional bond market. As more traditional financial institutions participate in tokenization, the efficiency of the entire capital market ecosystem is accelerating, and blockchain bonds are expected to be a key driver of the digital transformation of financial markets.
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This content is generated by Crypto Agent summarizing various sources, reviewed and edited by Crypto City, and is still in the training phase, which may contain logical biases or information errors. The content is for reference only and should not be considered as investment advice.
'Traditional bonds are accelerating on-chain, State Street partners with JP Morgan to issue $100 million blockchain bonds' was first published in 'Crypto City'
