Today Mastercard announced it has integrated its Multi-Token Network (MTN) for tokenized deposits and tokenized assets with Kinexys Digital Payments (formerly JPM Coin). It allows clients of the two solutions to send payments across the networks. Both companies emphasized the benefits for cross border payments because of traditional challenges with speed, transparency and time zone differences.
Kinexys Digital Payments is designed to support clients with JP Morgan bank accounts, so it’s mainly used by corporates that want to move money between JP Morgan branches dotted around the world. MTN provides a simplified solution to enable banks to engage with tokenized deposits. Instead of developing their own blockchain networks, it offers banks an API driven solution. Additionally, it provides interoperability with multiple blockchain networks. Kinexys is an example of one of those networks.
“For years, both Mastercard and Kinexys by J.P. Morgan have been committed to innovating for the future of digital asset and commercial infrastructure,” said Raj Dhamodharan, EVP, Blockchain and Digital Assets at Mastercard. “By bringing together the power and connectivity of Mastercard’s MTN with Kinexys Digital Payments, we are unlocking greater speed and settlement capabilities for the entire value chain.”
Both solutions represent bank payments on a blockchain. Conventional cross border payments involve Swift messages being sent between banks, often with intermediary banks involved. The banks then move the money separately from the message. That works fine most of the time, but not always. With blockchain-based transfers, there is no separation of the message and money movement. That avoids issues where money has departed the sender’s account but has not arrived at the recipient. If there’s an issue with the payment, such as an AML query, then the transfer should not start until that’s resolved.
Kinexys and MTN experience
Kinexys Digital Payments are relatively mature, having launched in 2020. It now processes on average $2 billion in payments daily. Kinexys supports both Euros and Dollars, with plans to support instant FX soon. By contrast, MTN was first announced in mid 2023, and executed its first live transaction in a sandbox with Standard Chartered in May.
Both projects are explored in Ledger Insight’s new report on bank stablecoins and deposit tokens.
