Alibaba has agreed to employ JPMorgan’s blockchain infrastructure to process tokenized payments in dollars and euros, with deployment projected for December 2025. The project combines JPMorgan’s wholesale bank value tokenization platform with Alibaba’s contract automation capabilities. This partnership will affect B2B merchants, custodians, and compliance teams operating in cross-border markets.
The solution relies on JPMorgan’s JPMD infrastructure, operated primarily on the enterprise platform Kinexys (formerly Onyx). While JPMorgan has tested variants of its technology on public networks in specific cases, JPMD operates as a permissioned network, which allows controlling participants, preserves data privacy, and facilitates regulatory compliance.
The system uses “deposit tokens” – digital representations of commercial money recorded on the bank’s balance sheet that constitute a direct claim on those liabilities. These tokens remain within the regulated banking environment and, where applicable, are covered by protection schemes such as deposit insurance (for example, the FDIC in the U.S.). This structure contrasts with stablecoins issued by entities outside the banking system and offers a tokenization route aligned with strict regulatory frameworks, especially relevant in jurisdictions with capital controls and restrictions on digital assets.
Technically, the platform enables immutable and near-instant transfers of value: JPMorgan estimates settlements around three seconds, compared with days required by traditional processes. Alibaba will integrate its AI Agentic Pay engine to transform commercial conversations into contractual drafts and automate payment initiation on the tokenized network, reducing manual intervention in the settlement chain.
Business and Regulatory Implications for JPMorgan
The project also contemplates interoperability, with JPMorgan pursuing frameworks that connect different networks and banks. This includes a prior collaboration with another regional bank to facilitate inter-blockchain transfers, pointing to a multi-network oriented architecture design.
For product managers and compliance teams, this partnership represents a case of “regulated innovation”: tokenization within the bank’s balance sheet minimizes counterparty risks associated with non-bank issuers but requires custody controls, KYC/AML procedures, and adaptation of operating frameworks.
For treasuries and trade logistics departments, the technology means capital release due to shorter settlement times and reduced operational friction. The system targets settlement times of approximately 3 seconds, with projected operating cost reductions of around 70%.
This initiative marks significant progress toward institutional tokenization of money, but its adoption will ultimately depend on technical alignment and the regulatory framework in the jurisdictions involved.
