The convergence of traditional finance and digital assets is no longer a distant vision but a structural transformation currently taking place.

According to the latest research from JPMorgan Chase on August 27, Wall Street giants are tokenizing real-world assets (RWA) at unprecedented speed and integrating them into core financial operations.

This is primarily manifested in three frontier areas: money market funds tailored for stablecoins, blockchain-based intraday repo transactions, and fully digitized commercial paper issuance.

JPMorgan believes these innovations could enhance trading efficiency, reduce costs, and provide better liquidity management, though regulatory framework development still requires time, with the CLARITY Act expected to be formally passed only by early 2026.

**Stablecoin Reserve Funds: Digital Transformation of Traditional Money Funds**

Traditional financial institutions are actively embracing the stablecoin market, viewing it as a key bridge connecting the digital and real worlds.

The report indicates that Bank of New York Mellon is preparing to launch a money market fund focused on stablecoin reserves, becoming the third asset management giant to enter this field after BlackRock and Goldman Sachs.

Last week, Goldman Sachs submitted an application for a stablecoin reserve fund, while BlackRock launched the Circle Reserve Fund as early as late 2022. These fund shares are intended to be held by stablecoin issuers as reserve backing for their circulating payment stablecoins.

According to documents filed with the U.S. Securities and Exchange Commission, this money fund named "BNY Dreyfus Stablecoin Reserves Fund" primarily targets stablecoin issuers for use as reserve assets for their stablecoins.

The fund is classified as a government money fund, with investment targets strictly limited to U.S. Treasury securities, Treasury repo, and cash.

In SEC filings, Bank of New York Mellon stated that "since the fund intends to invest only in certain qualified reserve assets that comply with stablecoin legislation requirements, the fund's yield may be lower than other money funds permitted to invest in broader investment ranges and longer maturities."

**Blockchain-Enabled Intraday Repo: Making 24/7 Trading a Reality**

Liquidity management is at the core of financial markets. The report highlights two breakthrough developments utilizing blockchain technology to revolutionize the repo market, aimed at meeting liquidity needs outside market trading hours.

The first case involves a standard repo transaction completed through the Tradeweb platform on Canton Network, a public blockchain, with the entire process occurring on a Saturday.

This transaction tokenized U.S. Treasury securities deposited at a DTCC subsidiary and used them as collateral to borrow Circle's stablecoin USDC.

The entire transaction was completed instantly on-chain without requiring dealers as intermediaries, achieving instant settlement impossible in traditional markets. Multiple institutions including Bank of America and Citadel participated, highlighting the enormous potential for cross-institutional collaboration with this technology.

The second case comes from collaboration between JPMorgan, HQLAx, and Ownera.

They launched a cross-ledger repo solution that allows traders to exchange between JPMorgan's cash ledger and HQLAx's collateral ledger, with settlement and maturity times precise to the minute.

This provides institutions with new efficient tools for optimizing intraday liquidity, far exceeding the settlement efficiency of traditional repo transactions.

**Commercial Paper's Blockchain Revolution: Full Life-Cycle Digitization**

Blockchain applications have penetrated deep into the core processes of traditional debt instruments.

The report reveals that Oversea-Chinese Banking Corporation issued $100 million in U.S. commercial paper through JPMorgan's digital debt services, becoming the first bank to issue commercial paper using blockchain throughout its entire life cycle (issuance, settlement, servicing, and record-keeping).

State Street Bank purchased all the paper and became the first third-party custodian to go live on the digital debt services.

By leveraging blockchain, these processes become more efficient and transparent, while bringing additional benefits such as faster settlement times.

JPMorgan notes that the intersection of digital assets and traditional finance is just the beginning, but large-scale adoption still requires time as regulation in this field develops.

The U.S. CLARITY Act is ongoing new legislation aimed at establishing a comprehensive regulatory framework for all digital assets in the market, addressing market structure and jurisdictional ambiguities between the U.S. Securities and Exchange Commission and the Chicago Mercantile Exchange.

The act has passed the House but has not yet passed the Senate, and is expected to require more time. JPMorgan anticipates the act will not reach the U.S. President's office until early 2026.