In a groundbreaking development in the finance sector, Siemens AG, the renowned German industrial giant, has adopted JPMorgan's innovative blockchain-based payment system Onyx, in conjunction with SWIAT's private blockchain, to successfully issue and settle a tokenized version of its commercial paper.
This significant announcement was made on a Monday, highlighting Siemens' issuance of €100,000 worth of crypto securities under the German Electronic Securities Act (eWpG). This transaction took place on September 13 and impressively concluded with the redemption of the securities just three days later.
The payments associated with this transaction were executed on the Onyx network utilizing the advanced JPM Coin System, while the asset transfers were effectively settled using the delivery-versus-payment (DvP) mechanism on the SWIAT network. The efficiency of this blockchain transaction was underscored by the entire process taking only 93 seconds, beginning with the confirmation of the trade by all parties involved on the SWIAT platform and culminating in the final confirmation of settlement.
This swift execution indicates that both asset and payment transfers were completed seamlessly and quickly. Importantly, DekaBank also played a role in this transaction, serving as a regulated crypto securities registrar within the SWIAT network. This transaction not only marks a significant achievement for Siemens and JPMorgan but also signals the beginning of a promising collaboration between Onyx and SWIAT.
The objective of this partnership is to create asset issuance products that are built on blockchain technology specifically for commercial banks. By leveraging this advanced technology, they aim to reduce value chain complexities, enhance transaction flexibility and speed, and ultimately, make financial transactions via blockchain rails scalable for commercial banks. The tokenization of traditional financial instruments, commonly known as real-world assets (RWA), has seen substantial growth within the blockchain technology sector.
Major banks have shown significant interest in this transition, with JPMorgan spearheading advancements in this area through its Onyx initiative and the pioneering JPM Coin blockchain-based settlement technology. According to Umar Farooq, the head of Onyx by JPMorgan, transactions involving JPM Coin have significantly surged after the introduction of programmability to the network.
On certain days, the transaction volumes reached multiple billions of U.S. dollars, showcasing the system's robust capabilities. However, despite JPMorgan’s extensive use of blockchain technology, CEO Jaime Dimon has publicly criticized cryptocurrencies, notoriously referring to them as “pet rocks” on various occasions..