JPMorgan’s Kinexys and Singaporean bank DBS are collaborating on a new interoperability framework that will allow tokenised deposits to move between their blockchain ecosystems.

With the initiative, the two banks seek to enable real-time, cross-border settlement of tokenised deposits across both public and permissioned blockchains, aiming to establish a new standard for the industry.

Both banks currently offer customers 24/7 liquidity and real-time payment settlement within their respective ecosystems, DBS Token Services and Kinexys Digital Payments, through their blockchain-based banking services.

The banks said the collaboration will serve to further enhance these services.

Once completed, the framework will establish interoperability highways between the two banks, providing customers with greater reach thanks to their ability to conduct interbank transactions on-chain, they added.

The new framework will potentially enable the combined institutional customer base of Southeast Asia's largest bank and the US to complete mutual payments and exchange or redeem their tokenised deposits on both banks' platforms across borders and with 24-hour real-time availability.

For example, a JPMorgan institutional customer could pay a DBS institutional customer using JPMorgan Deposit Tokens (JPMD) on the Base public blockchain, with the recipient able to exchange or redeem them for equivalent value via DBS Token Services.

Rachel Chew, group chief operating officer and head of digital currencies, global transaction services at DBS Bank, emphasised that as the digital asset ecosystem continues to grow, interoperability remains a critical part of reducing fragmentation and ensuring that the full value of tokenised money can be transferred safely across borders.

“Our collaboration with Kinexys by JPMorgan 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,” she added.

Naveen Mallela, global co-head of Kinexys by JPMorgan, emphasised that the collaboration with DBS on this initiative is “a clear example” of how financial institutions can work together to promote the benefits of tokenised deposits for institutional clients while ensuring interoperability between markets.

The initiative comes at a time of accelerated growth in the world of tokenised finance.

In a 2024 survey conducted by the Bank for International Settlements, commercial banks in nearly one-third of the jurisdictions surveyed had launched, experimented with or conducted research on tokenised deposits

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