In response to the ongoing crypto surge, JP Morgan’s Onyx digital assets unit and the $500 billion asset manager Apollo Global have partnered with the Monetary Authority of Singapore for a proof-of-concept under ‘Project Guardian.’
This collaborative effort seeks to investigate the integration of blockchain technology to streamline and automate portfolio management, focusing on addressing challenges related to trading and administering alternative assets within traditional portfolios.
The collaboration aims to leverage blockchain technology to overcome historical challenges associated with the operational intensity of managing alternative assets.
This includes complexities in trading and administration, often considered cumbersome within traditional portfolios.
The project aims to demonstrate how tokenization can revolutionize portfolio construction and management.
Tyrone Lobban, Head of Onyx Digital Assets, highlights the transformative potential of blockchain technology, stating, “By leveraging the power of blockchain technology, we have shown how the construction and management of discretionary portfolios could be revolutionised.”
The utilisation of LayerZero, a cross-chain messaging protocol, facilitates connectivity with a permissioned Avalanche subnet, allowing for seamless subscriptions and redemptions of funds offered by WisdomTree.
Avalanche’s native cryptocurrency, AVAX, has experienced a remarkable 60% surge in the past week, securing its position as the best-performing digital asset in the top 20.
The project concludes that tokenization simplifies the management of alternative assets by replacing manual processes with automated, smart contract-driven operations. This development enables wealth managers to easily incorporate alternative assets into client portfolios.
The project’s findings also highlight the potential for mass, automated rebalancing of portfolios using smart contracts for discretionary portfolios.
Tokenisation proves instrumental in replacing manual processes with automated, efficient smart contract operations for payments and investor register updates.
Interoperability protocols across different blockchain platforms extend the range of investable assets without the need to transfer underlying assets from their original ledgers.
Pioneering Blockchain Integration in Forex Trading
In parallel developments under MAS’s Project Guardian, Citibank introduces a blockchain-based application designed for pricing and executing bilateral spot foreign exchange (FX) trades.
Developed in collaboration with T Rowe Price and Fidelity International, the application offers real-time streaming of price quotes and on-chain record-keeping of trade executions, ensuring immutable and secure trade data.
Sam Hewson, Head of FX Sales at Citi, emphasises the strategic move towards building foundational capabilities to offer liquidity, pricing, and risk management to global clients.
The application, currently tested using USDSGD, utilises a private permissioned instance of the Avalanche blockchain.
While not yet available for clients, it signifies Citi’s proactive steps towards embracing blockchain technology in the realm of foreign exchange.