J.P. Morgan Arranges Galaxy Digital’s $50 Million Tokenized Bond on Solana

TLDR

• J.P. Morgan arranged a $50 million tokenized commercial paper issuance for Galaxy Digital on Solana blockchain, marking one of the first such deals in the U.S.
• Coinbase and Franklin Templeton purchased the short-term debt instrument, with settlement conducted using USDC stablecoin from Circle.
• J.P. Morgan created the onchain token representing the debt and managed the settlement process for the primary issuance.
• The tokenized asset market could reach $18.9 trillion by 2033 according to BCG and Ripple projections, driven by efficiency gains and faster settlement times.
• SEC Chairman Paul Atkins recently endorsed tokenization as a key innovation that could transform capital markets within the next couple of years.

J.P. Morgan has arranged a $50 million commercial paper issuance for Galaxy Digital Holdings on the Solana blockchain. This transaction represents one of the earliest debt deals executed on a public network in the United States.

The offering is a tokenized short-term corporate bond. J.P. Morgan created the blockchain token representing the bond and handled the settlement of the primary issuance.

Asset manager Franklin Templeton and crypto exchange Coinbase purchased the tokenized securities. Issuance and redemption will be paid in Circle’s USDC dollar-pegged stablecoin.

Galaxy’s investment banking arm structured the issuance. Coinbase served dual roles as both investor and wallet provider for the transaction.

Jason Urban, global head of trading at Galaxy, stated the deal puts into practice open, programmable infrastructure that supports institutional-grade financial products. The transaction demonstrates practical implementation of blockchain technology for traditional finance instruments.

Growing Institutional Adoption

Franklin Templeton has already created a tokenized money market fund. The asset manager’s participation signals established financial institutions moving deeper into blockchain-based products.

J.P. Morgan has been an early mover in blockchain technology. The bank developed JPM Coin in 2019 and launched its blockchain unit, Onyx, in 2020.

The Onyx division, now integrated under Kinexys, has conducted blockchain-based repo trades. It has also facilitated cross-border payments and tokenized asset settlements with partners including BlackRock and Siemens.

Commercial paper is typically issued through legacy systems. It is a short-term debt tool that companies use to raise working capital.

Structuring the instrument onchain and settling with USDC represents a shift toward blockchain infrastructure. Proponents say the process promises efficiency gains and faster settlement times.

Market Projections and Regulatory Support

The tokenized asset market could reach $18.9 trillion by 2033 according to BCG and Ripple projections. The tokenized commercial bond market is still in its infancy but continues to grow.

Analysts forecast that the sector could grow to a $300 billion market capitalization by 2030. The total real-world tokenized asset market capitalization is over $18.4 billion at the time of writing.

Tokenizing commercial, sovereign and municipal bonds can lower costs and settlement times. The process removes financial intermediaries from the issuance and clearing process.

The trend has gained support from U.S. regulators. SEC Chairman Paul Atkins recently endorsed tokenization as a key innovation for capital markets.

Atkins said in a FOX Business interview last week that tokenization has the potential to change the financial system. He indicated this transformation could occur over the next couple of years.

Hong Kong’s Monetary Authority has prioritized the tokenization of financial assets. The authority announced a five-year plan to bring bonds and physical assets onchain by 2030.

In November, Hua Xia Bank issued 4.5 billion yuan in tokenized bonds, equivalent to $600 million. The bond tranche featured a 1.84% yield and is settled exclusively in the digital yuan.

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