Multinational banking entity JP Morgan reportedly carried out its first-ever cross-border transaction with the help of decentralized finance (DeFi) via a public blockchain.

Specifically, the trade was reportedly supported by the Monetary Authority of Singapore’s (MAS) Project Guardian on Nov. 2 – which was included within the scope of a pilot program to “explore potential decentralized finance (DeFi) applications in wholesale funding markets.”

Alternatively talking, the pilot reportedly marked an extra strides into the examination regarding the way traditional financial institutions can utilize tokenized assets and DeFi protocols to carry out financial transactions, among other use cases. 

Singapore’s top-tier bank – DBS Bank, Tokyo-headquartered banking company SBI Digital Asset Holdings and business leadership platform Oliver Wyman Forum were also the participants in the pilot program. 

The trade was conducted on Ethereum layer-2 network Polygon, using a modified version of the Aave protocol’s smart contract code.

MAS further claimed that a “live cross-currency transaction” took place, with the involvement of tokenized Singaporean dollar and Japanese yen deposits, as well as a simulated exercise of purchasing and selling of tokenized government bonds.

Tyrone Lobban, head of blockchain launch and Onyx Digital assets at JP Morgan’s Onyx business unit, shared the news on Twitter on Nov. 2, noting the tokenized SGD deposits were the first issuance of tokenized deposits by a bank. 

MAS chief fintech officer Sopnendu Mohanty additionally remarked that it was a “big step” toward achieving enhanced efficiency for financial networks, and the most recent pilot has been an assistance in the development of the nation’s digital asset strategy. 

“The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralized finance have the potential to transform capital markets.”