JPMorgan Dives into Public Blockchain with Tokenized Treasury Transaction via Ondo Finance

In a significant step toward integrating traditional finance with decentralized technologies, JPMorgan Chase has completed its first transaction on a public blockchain to settle tokenized U.S. Treasuries. This milestone was achieved in collaboration with Ondo Finance and Chainlink, showcasing the growing intersection between institutional finance and crypto infrastructure.

JPMorgan Settles Tokenized Treasuries on Public Testnet

The transaction occurred on Ondo Chain’s testnet using a Delivery versus Payment (DvP) mechanism—a process that ensures securities are transferred only after payment is received. In this test, JPMorgan’s blockchain division, Kinexys, facilitated internal fund transfers to acquire tokenized U.S. Treasuries through Ondo’s OUSG (Ondo Short-Term US Treasuries Fund), utilizing Chainlink’s cross-chain orchestration technology.

“This trial enables us to seamlessly bridge institutional payments with both private and public blockchain infrastructures,” said Nelli Zaltsman, Head of Platform Settlement Solutions at Kinexys. “The goal is to deliver scalable, secure solutions to enhance efficiency in financial settlements.”

Why DvP on Blockchain Matters

The DvP model is a foundational method in financial markets for mitigating settlement risk. Traditionally, delays and inconsistencies in processing securities transactions have led to inefficiencies and potential losses. Ondo Finance highlighted that such failures have cost the market over $914 billion in the last decade.

Using blockchain for DvP settlements allows both assets and payments to be exchanged simultaneously across different networks, reducing individual counterparty risk and streamlining operations through automation.

Industry Trend: Institutions Embrace Public Chains

Although JPMorgan has conducted blockchain-based transactions previously, this marks the first time it has used a public blockchain for settlement. The move indicates a broader institutional shift toward leveraging decentralized financial ecosystems.

This announcement follows similar initiatives by Morgan Stanley, which is exploring crypto offerings through E*Trade, and Fidelity, which recently started trialing its own stablecoin.

Sergey Nazarov, co-founder of Chainlink, commented, “Institutions now recognize that public blockchain ecosystems present a significant opportunity to serve a vast, untapped market.”

Despite the innovation, market response was modest. Both ONDO and LINK tokens dropped around 1% following the news, mirroring a slight dip across the broader real-world asset (RWA) token space, which declined by 0.7% in the past day.