DBS, J.P. Morgan Working to Build Cross-Bank Tokenized Deposits Framework

Financial institutions worldwide are steadily advancing efforts toward tokenization to simplify asset transfers and settlements. Reflecting this shift, Singapore’s DBS Bank and J.P. Morgan’s Kinexys are working together to establish an interoperability framework that allows tokenized deposits to move smoothly across their respective blockchain platforms.

Enabling Seamless Cross-Bank Token Transactions

The planned system aims to facilitate the transfer and completion of tokenized deposit transactions on public and permissioned blockchains, setting a benchmark for cross-platform interoperability. Each bank currently offers clients around-the-clock liquidity and instant payment settlements within its own blockchain environment. This collaboration seeks to extend those services, linking both institutions through interoperable channels that will allow cross-bank on-chain transactions between different blockchain networks.

Under the proposed setup, a J.P. Morgan client could transfer J.P. Morgan Deposit Tokens (JPMD) via the Base public blockchain to a DBS customer. The DBS account holder would then receive the same value through DBS Token Services, maintaining parity of tokenized deposits across both platforms. This approach supports consistency and trust within a multi-chain financial system.

Collaboration for Reliable Tokenized Assets

Naveen Mallela, Global Co-Head of Kinexys at J.P. Morgan, stated that the initiative reflects the company’s focus on developing advanced financial infrastructure through collaboration and expertise. He added that “working with DBS on this initiative is a clear example of how financial institutions can collaborate to further the benefits of tokenised deposits for institutional clients while protecting the singleness of money and ensuring interoperability across markets.”

Building on this point, Rachel Chew, Group Chief Operating Officer and Head of Digital Currencies at DBS Bank, emphasized that as digital assets gain traction, interoperability is vital to reduce market divisions and allow the safe movement of tokenized funds across different systems, ensuring their full value is preserved.

Global Momentum for Tokenized Deposits

The collaboration between DBS and J.P. Morgan is part of a wider industry shift toward blockchain-based deposits. In the United Kingdom, several major banks—including Barclays, Lloyds, and HSBC—are participating in a live pilot of tokenized sterling deposits. This project, scheduled to continue until mid-2026, aims to demonstrate the practical advantages that tokenized deposits can deliver to individuals, organizations, and the overall UK market.

The movement is also reflected in international research. Based on a 2024 study by the Bank for International Settlements (BIS), around one-third of commercial banks in the regions surveyed have initiated, tested, or explored the use of tokenized deposits.

In a related move, the Bank of New York Mellon was reported in October to be assessing tokenized deposits as part of its efforts to enable payments through blockchain networks. This development shows the continued commitment of global financial intermediaries to expand on-chain settlement and bring blockchain technology into regular banking operations.