Major US investment bank JPMorgan has tokenized a private-equity fund on its own blockchain platform, rolling out the tokenized product to its high-net-worth clients.
JPMorgan’s private bank and asset management divisions have initiated the first transaction on the upcoming fund tokenization platform, Kinexys Fund Flow, the company said in a statement shared with Cointelegraph on Thursday.
According to the announcement, the transaction was completed jointly with participation by Citco, a global company that provides a range of asset-servicing solutions.
JPMorgan expects a broader rollout of Kinexys Fund Flow next year and expects to tokenize additional assets such as private credit and real estate.
More flexible portfolios
Real-world asset (RWA) tokenization is a process of digitizing ownership of assets such as real estate, commodities or funds into digital tokens on a blockchain. Unlike traditional assets, tokenized versions offer more flexibility such as fractional ownership or usage as collateral.
According to Anton Pil, who serves as head of global alternative investment solutions at JPMorgan’s asset management arm, Kinexys Fund Flow is an important step in transforming how investors allocate and manage private fund portfolios.
“Enabling real-time tri-party settlement between fund managers, transfer agents and distributors will ultimately unlock new sources of liquidity and more flexible portfolio construction,” he said.
Asset tokenization has emerged as one of the key trends in the past few years, with investment giants like BlackRock betting that every financial asset is set to be tokenized in the future.
JPMorgan has been taking efforts to tokenize assets for a while now, though. The banking giant has been active in tokenization and blockchain-based financial infrastructure since around 2019, when it formally launched its Onyx division and related projects.
Related: JPMorgan reportedly plans to let clients borrow against their Bitcoin and Ether
The company rebranded Onyx to Kinexys in late 2024 with a mission to accelerate the adoption of blockchain technology and tokenization into mainstream financial services.
Cointelegraph approached JPMorgan for comment regarding its tokenization of a private-equity fund on Kinexys but had not received a response by publication.
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