In a coordinated test involving both public and permissioned blockchain networks, Ondo Finance, J.P. Morgan’s blockchain unit Kinexys, and Chainlink have jointly executed a cross-chain Delivery versus Payment (DvP) transaction.
The test, conducted on the Ondo Chain testnet, marks a key milestone in the development of blockchain-native infrastructure for real-world asset (RWA) settlement.
The transaction involved the exchange of tokenized short-term U.S. Treasuries (OUSG) on Ondo Chain, with payment routed through Kinexys Digital Payments’ permissioned network - orchestrated using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and Chainlink Runtime Environment (CRE) for secure off-chain coordination. It is the first DvP operation of its kind to connect a public, purpose-built RWA blockchain to an institutional-grade payment network operated by a major global bank.
While the pilot was conducted in a controlled testnet environment, the architectural implications could be significant. It showcases a model for simultaneous settlement of tokenized assets and fiat-equivalent payments across siloed chains, reducing settlement risk and removing the reliance on intermediaries that plague traditional clearing systems.
How the Transaction Worked
The completed DvP test facilitated atomic settlement of two separate legs:
- The asset leg: a tokenized treasury asset, OUSG, issued on Ondo Chain.
- The payment leg: processed on Kinexys Digital Payments, J.P. Morgan’s institutional blockchain for cash transactions and settlement.
Chainlink’s infrastructure served as the orchestration layer, with CRE managing off-chain logic to ensure both legs of the transaction were executed synchronously. This architecture enabled simultaneous asset and payment transfers across two distinct blockchains, solving for trustless settlement without requiring a third-party clearinghouse.
The approach mirrors traditional DvP workflows - commonly used in institutional trading to reduce counterparty risk—but implemented through on-chain smart contracts and cross-chain messaging, with near real-time finality and transparency.
What Is Delivery versus Payment
DvP is a standard in financial markets where asset delivery occurs only if payment is received, reducing the chance that one party fails to deliver after the other has paid. Yet in traditional capital markets, DvP is often plagued by latency, reliance on intermediaries, and failures stemming from system fragmentation.
According to industry estimates, settlement failures have cost global markets more than $900 billion over the last decade, especially in cross-border transactions where differing legal frameworks, custodians, and currency risks introduce delays and complexity.
A blockchain-native DvP process - especially across different types of chains - introduces:
- Atomicity: assets and payments move together or not at all.
- Programmability: conditions and compliance checks can be embedded into smart contracts.
- Transparency: settlement records are permanently visible and verifiable on-chain.
- Efficiency: processes that once took days can be compressed into minutes or seconds.
Ondo Chain and the Tokenization of U.S. Treasuries
Ondo Chain is a new Layer 1 network developed specifically to support institutional-grade real-world asset tokenization. Its first asset, OUSG (Ondo Short-Term U.S. Treasuries Fund), gives on-chain users access to yield from government bonds - an asset class that has become a cornerstone of RWA experimentation in DeFi.
In this pilot, OUSG functioned as the transferable asset exchanged during the DvP transaction. The decision to use a tokenized version of treasuries underscores a growing trend: leveraging blockchain rails for traditional fixed-income instruments, particularly those backed by sovereign issuers with deep liquidity and low credit risk.
Kinexys Digital Payments is J.P. Morgan’s rebranded and expanded blockchain division (formerly known for JPM Coin), designed to facilitate institutional payments, netting, and settlement across its permissioned networks.
Since launch, Kinexys has processed over $1.5 trillion in notional value, averaging $2 billion in daily transactions, according to recent figures. It operates in a closed environment tailored to institutional standards of privacy, regulatory compliance, and security.
The pilot marks a turning point for Kinexys: expanding beyond closed-loop transactions to test interoperability with public chains, such as Ondo Chain. This opens up the possibility for institutional liquidity to settle against assets like tokenized treasuries, real estate, or future derivatives on public or semi-public ledgers.
Chainlink as the Interoperability Layer
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and the Chainlink Runtime Environment (CRE) were central to orchestrating the transaction. CCIP handles secure messaging and value transfer across blockchains, while CRE allows external systems - such as Kinexys - to interact with smart contracts under tightly controlled, auditable conditions.
The use of these technologies demonstrates how off-chain infrastructure can securely coordinate on-chain actions, enabling compliance with financial regulations while maintaining blockchain benefits such as transparency and finality.
This is not the first time Chainlink has played a key role in cross-chain coordination for institutions, but it is the first publicly reported collaboration involving both Kinexys and a public RWA-centric chain.
The successful pilot of a DvP transaction between public and permissioned blockchains provides a blueprint for integrating real-world assets into interoperable, decentralized financial systems. Specifically, it illustrates:
- Scalable asset settlement models for tokenized treasuries and other fixed-income products.
- Atomic cross-chain workflows that reduce the need for intermediaries and improve liquidity.
A convergence pathway for traditional finance and DeFi under real-world legal, regulatory, and operational constraints.
For institutional players, this is more than a technical demonstration. It signals that public blockchain ecosystems are beginning to meet the operational standards required for real-world adoption—not just among crypto-native users, but among banks, asset managers, and global settlement systems.
Challenges and Next Steps
While the pilot was successful, deploying such a framework in live production environments will face several hurdles:
- Regulatory clarity: Many jurisdictions still lack clear guidelines for tokenized securities and synthetic cash equivalents.
- Custody frameworks: Institutions require legal clarity on asset ownership, key management, and insolvency protections for tokenized assets.
- Risk mitigation: Even with protocol-level atomicity, smart contract risks, oracle dependencies, and transaction fees remain concerns.
- Standardization: Cross-chain DvP models will need standardized message formats, compliance schemas, and legal interoperability.
Nevertheless, the pilot’s success lays groundwork for live transactions in tokenized securities, real-time payments, and eventually, cross-border CBDC settlement systems.
RWA Protocols Moving Up the Stack
Ondo’s testnet transaction adds to a growing list of RWA tokenization pilots and implementations in 2024–2025:
- BlackRock’s BUIDL: tokenized U.S. Treasury fund launched on Ethereum-backed infrastructure.
- Franklin Templeton: tokenizing money market funds for use in digital marketplaces.
- Backed Finance and Maple: bringing fixed-income credit products to DeFi protocols.
- Centrifuge and Goldfinch: enabling emerging market lending through tokenized real-world debt.
These developments signal a shift in institutional behavior from experimentation to cautious deployment. The challenge now is not simply technical feasibility - it is regulatory, operational, and economic integration.
Toward Institutional Settlement Infrastructure for Public Blockchains
The test transaction involving Ondo, Kinexys by J.P. Morgan, and Chainlink represents a new phase in blockchain-based finance. By achieving cross-chain DvP between a tokenized treasury asset and a bank-operated payments network, the pilot demonstrates how future markets could settle value trustlessly, efficiently, and across previously siloed systems.
The success on testnet is not a guarantee of production-level readiness, but it is a clear indicator that the rails for real-world asset settlement are being laid - with public blockchains playing an increasingly central role. As institutions look to streamline operations, lower counterparty risk, and increase liquidity velocity, these systems may soon become part of the core financial infrastructure.