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JP Morgan plans to invest heavily in the crypto segment

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HIGHLIGHTS :

  • There has been an increase in the number of illegal cryptocurrency transactions in the DeFi segment
  • Scam cases are on the rise in this segment
  • The emphasis is on strengthening the security of these protocols.

The number of illegal cryptocurrency transactions in the DeFi segment has grown exponentially in recent years. Hackers have stolen nearly $1.7 billion worth of digital assets so far this year. DeFi protocols were targeted in 97 percent of hackers’ attacks

There has been an increase in the number of illegal cryptocurrency transactions

Financial services firm JP Morgan expects decentralized finance (Defi) business to grow rapidly. JP Morgan plans to make a big investment in Institutional Defi. Institutional DeFi is meant to apply know-your-customer standards to crypto lending pools without the need for permission.

Tyrone Lobban, head of JP Morgan’s Onyx Digital Assets, believes tokenizing US Treasury or capital market fund shares would allow them to be used as collateral in DeFi pools. “It aims to bring these billions of dollars of assets into DeFi so that we can use these new mechanisms in trading and lending the size of institutional assets,” he said.

Scam cases are on the rise in this segment

JP Morgan’s blockchain-based collateral settlement system was recently expanded to tokenize copies of BlackRock’s capital market fund shares.

Lobban reported that Onyx Digital Assets has a trading volume of $350 billion for this type of application on its blockchain. Payments on this blockchain are made in JPMorgan’s digital token JPM Token. Apart from this, the Monetary Authority of Singapore, in collaboration with JP Morgan, DBS Bank, and Marketnode, has conducted an experiment called Project Guardian. In this, a liquidity pool permitted by tokenized bonds and deposits is used to test institutional DeFi.

The emphasis is on strengthening the security of these protocols.

It validates the information of clients on behalf of large financial institutions rather than Defi and crypto custodial firms. In this, the trader has to show that he has legal permission from the bank to trade. JPMorgan has not chosen which Defi platforms and firms it will work with, but it says there will be firms of good standing. The number of illegal cryptocurrency transactions in the Defi segment has grown exponentially in recent years. Hackers have stolen nearly $1.7 billion worth of digital assets so far this year. Defi protocols were targeted in 97 percent of the hackers’ attacks. Because of this the need for security on Defi increased.

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