More than 15 major global banks are embarking on an initiative called tokenized finance, a major evolution that could have significant repercussions for the future of Bitcoin. According to JPMorgan, this transition toward infrastructures based on private blockchains could pose particularly high risks for Bitcoin in the long term. Financial institutions are increasingly adopting payment solutions on permissioned networks, which could diminish the attractiveness and activity of public blockchains.
A massive institutional movement
JPMorgan’s Kinexys platform, which has processed over $3 trillion since its launch, is experiencing explosive growth with transactions exceeding $7 billion per day. This system, initially launched as Onyx in 2020 and renamed in 2024, illustrates the growing gap between traditional financial practices and the emergence of innovative solutions based on blockchain.
Particularly, the majority of transactions processed on Kinexys utilize shared and permissioned networks. For example, on the Canton Network, institutions such as DTCC are committing to tokenizing U.S. Treasury bills by 2026. Other banks, like HSBC and Goldman Sachs, are also exploring this avenue through tokenized deposits and bonds.
The emergence of tokenization and its implications
JPMorgan, in its analyses, emphasizes that the rise of tokenized finance represents one of the greatest challenges for Bitcoin. Indeed, the priority that institutions place on systems based on private blockchains is explained by concerns related to governance, confidentiality, and legal compliance. This has been corroborated by the Bank for International Settlements, which also reported that public blockchains face significant challenges regarding scalability and financial integrity.
Currently, data illustrates that shared networks generate significantly higher fees compared to public blockchains. The Canton Network, for instance, has generated approximately $60 million in fees during the 30 days leading up to the end of June, compared to only $11 million for Ethereum, according to DeFiLlama. This demonstrates the growing attractiveness of institutional solutions that financial players could seize.
A collective initiative by major banks
It is important to note that this initiative is not limited to a single company. Indeed, over 15 major banks have formed a network of tokenized deposits through The Clearing House. This ambitious project aims to establish a framework for tokenized institutional settlement, with a launch scheduled for 2027, reflecting a collective desire to innovate and proactively position itself in the future of finance.
The stakes for Bitcoin
The current dynamics thus pose a real challenge to Bitcoin and public blockchains. If payments and assets continue to migrate to exclusively permissioned networks, there are concerns that this could lead to a decline in activity, liquidity, and capital in the Bitcoin ecosystem over time. This trend is worrying, particularly for ardent advocates of decentralized solutions who champion the openness and transparency of public blockchains.
For more information on the impact of tokenized finance on companies, check out this article on Fortune 500 companies. Additionally, the impending revolution known as tokenization could also transform the traditional financial landscape. A comprehensive exploration of successes in this area is available here, detailing how a startup managed to raise funds through modular blockchain.
Finally, the first transfer of securities by the London Stock Exchange using blockchain is a striking example of the rapid evolution of the sector, a partnership with Microsoft having paved the way for such innovations, as discussed in this article: the London Stock Exchange. The tokenization presents itself as a true revolution, redefining the contours of modern finance.
