JPMorgan reportedly tokenizes PE fund on blockchain platform

JPMorgan had tokenized a private-equity fund on its blockchain platform for the wealthy clients served by its private bank

JPMorgan Chase is reportedly deepening its involvement in the world of digital tokens.

Officials at the bank told the Wall Street Journal (WSJ) Thursday that JPMorgan had tokenized a private-equity fund on its blockchain platform for the wealthy clients served by its private bank.

For the alternative investments industry, it’s just a matter of time that a blockchain-based solution is going to be adopted, Anton Pil, head of global alternative investment solutions for JPMorgan’s asset management arm, told the WSJ.

It’s more about simplifying the ecosystem of alternatives and making it, frankly, a little easier to access for most investors, Pil said.

For example, a tokenized fund allows all parties to share one real-time view of who owns what and who has paid up on their investment promises, the report said. This helps lessen the surprises that come with “capital calls,” or the requests from private fund managers to investors to offer up a portion of the capital they had committed.

According to the WSJ, this move comes ahead of JPMorgan’s wider rollout next year of its fund tokenization platform, Kinexys Fund Flow. That platform pulls in data from fund managers, distributors and administrators, creates smart contracts representing fund ownership, and allows for the near-instant exchanging of cash and assets on the blockchain.

Tokenization, the report said, allows the bank to offer clients a digital representation of the ownership of an asset kept on a blockchain ledger.

As the WSJ noted, banks that have expressed a past wariness of cryptocurrencies have nonetheless argued for the potential of blockchain technology. The recent passage of the Genius Act, which established a regulatory framework for stablecoins has ushered in a broader wave of tokenization.

Goldman Sachs and Bank of New York Mellon announced a partnership in July to launch digital tokens that confer ownership of money-market funds managed by their asset management operations as well as investment firms such as BlackRock and Fidelity.