How J.P. Morgan’s blockchain platform can help real estate organizations

Onyx by J.P. Morgan, the firm’s blockchain platform, offers speed, programmability and other benefits for commercial real estate organizations through its four blockchain-based networks.

“What these networks have in common is our technological roots in building distributed ledgers and computing platforms that build off of blockchain technology,” said Zack Chestnut, Head of Business Development for J.P. Morgan Coin Systems. “But they all are built for different reasons.”

1. Liink by J.P. Morgan^SM

Liink by J.P. Morgan℠ is an information exchange network for payment-related data sharing between institutions. “The reason why blockchain is so powerful in this case is because it allows us to gain access to information without moving where the data resides,” Chestnut said.

This blockchain network can help real estate via several applications, including Confirm, which works to validate account numbers and information.

For example, if a U.S.-based real estate company wanted to send a large wire payment to a company named Indonesian Property Developers Inc., the U.S. company could add that overseas organization’s name and account number to Confirm. 

“Confirm would then verify the account is open and owned by Indonesian Property Developers Inc.,” Chestnut said. “You have the comfort of knowing that when you send your wire payment, it’s going to the right party with almost 100% certainty.”

2. Coin Systems

Coin Systems is designed to instantly transfer and clear fiat currency on a permissioned distributed ledger. 

Using this blockchain application in commercial real estate boasts many benefits, but two stand out:

• Speed: “Blockchain provides an always-on system that can move money 24 hours a day in near real time, including across borders and in high amounts,” Chestnut said. “It's simply a faster settlement experience than what’s available with other payment rails and account structures today.”
• Programmability: “Once you put several accounts onto the blockchain, you can make use of related functionality to program the accounts and make them smarter,” Chestnut said. “Specifically, it means there's a way to attach if-then logic to bank accounts.”

3. Onyx Digital Assets

Onyx Digital Assets tokenizes financial and real-world assets—including real estate—in blockchain to make them more portable, divisible and liquid.

“The asset side of real estate is where Onyx Digital Assets is arguably the most interesting,” Chestnut said. For example, properties could be purchased and tokenized in the future.

“Real estate, including retail, multifamily and mixed-use properties could be traded in a much more liquid way,” he said. “Instead of sending mortgage documents back and forth, you could tokenize individual assets and move the tokens around.”

Blockchain-based real estate investments could make properties more divisible. “A real estate asset or investment manager could buy an industrial warehouse and then sell 1/1,000 of that warehouse to 1,000 different investors,” Chestnut said. “You can keep track of everything in a tokenized manner. Especially if you think about things at the fund level—a large fund manager has the ability to be more liquid and rebalance portfolios.”

4. Blockchain Launch

Blockchain Launch is the firm’s R&D group that works to keep the firm ahead of the curve on blockchain developments. The team works to develop and commercialize new applications, networks and shared platform technology to address commercial real estate business challenges, identify upcoming technology trends and grow a deeper understanding of Web3 innovation.

“Our focus is on building next-generation financial infrastructure,” Chestnut said. “With blockchain technology we can help streamline the movement of information, money and digital assets.”

Blockchain currently benefits large organizations the most, but technology moves quickly. In the coming years, it has the potential to transform property management, investments and loans across commercial real estate.