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U.S. banking giant JP Morgan has utilized the Solana network for the issuance of commercial paper for Galaxy Digital, a form of short-term corporate loans. The transaction was also settled in USDC. With this move, the traditional banking world, which has long kept the crypto sector at arm’s length, is taking another step closer to crypto and innovative technology.
JP Morgan Chooses Solana #
The deal was announced this week and is considered one of the first times that commercial paper has been issued via a public crypto network. JP Morgan acted as the coordinating party and structured the deal, while Galaxy Digital issued this type of debt instrument for the first time in its history. The tokens were purchased by Coinbase and asset manager Franklin Templeton.
Notably, JP Morgan is deliberately deviating from its earlier crypto strategy. The bank had worked for years primarily with its own Onyx network and JPM Coin, but this time chose Solana as its public infrastructure.
This is a clear signal to the market. According to Galaxy, this transaction shows that public crypto networks are mature enough for serious financial products. As Galaxy Trading Head Jason Urban put it:
“This is a clear example of how public blockchains can improve the functioning of capital markets.”
The settlement was processed via a so-called “delivery-versus-payment” model. This means that payment and delivery occur simultaneously, which mitigates counterparty risk. This is crucial for large institutions. In this process, Coinbase played a dual role, both as an investor and as an infrastructure provider for custody, wallets, and the integration with USDC.
Solana Gains Ground with Institutions #
The fact that the transaction was entirely settled in USDC makes the story even more interesting. Stablecoins have been seen for years as a bridge between traditional finance and crypto, but their role in debt instruments has been limited until now. With this deal, Circle demonstrates that USDC is also suitable for large-scale institutional use.
The choice for Solana is primarily based on its technology. The network is known for low costs and high speed, characteristics that are important for financial applications with many transactions. Although Ethereum still dominates in tokenization, Solana is increasingly emerging as an efficient and cost-conscious choice.
Despite the historic nature of the transaction, a price rally for SOL did not materialize. The price is hovering around $137 and is lower than at the beginning of the week, after SOL briefly peaked above $145.