J.P. Morgan has previously made significant investments in blockchain, processing trillions of dollars in mortgage and deposit tokenization transactions through its Onyx platform, making it one of the first traditional banks to shift wholesale settlement to distributed ledger technology. It has also tested the Liink network with several banks in 2022-2023 to address interbank reconciliation pain points.

In terms of capital pathways, J.P. Morgan is directing internal funds and client liquidity towards projects led by Kinexys Labs, investing resources to develop programmable smart contract settlement infrastructure. The strategic motive is to secure pricing power for institutional-grade tokenized asset custody and settlement while addressing the encroachment of DeFi on traditional financial intermediaries.

Drawing a parallel to Citigroup and J.P. Morgan's positioning during the electronic clearing era, J.P. Morgan is currently in a control phase of transforming traditional banks towards an "Always on" infrastructure, similar to the dominant position established after the SWIFT network was created.

Essentially, this is a restructuring of the industry chain: clearer regulation accelerates the concentration of capital from fragmented traditional systems to programmable around-the-clock platforms. The mechanism is that 24/7 settlement significantly reduces opportunity costs and liquidity premiums, enabling real-time programmable allocation of funds, thereby reshaping the underlying architecture of global value transfer.

ABAB News · Law of Cognition

When regulation is clear, it marks the decline of old intermediaries and the rise of new infrastructure.
Liquidity premium = time delay × uncertainty, programmable settlement directly reduces to zero.
Banks sell structures, intermediaries sell channels, and winners sell around-the-clock programmable trust.