JPMorgan issued and settled a $50M Galaxy Digital commercial paper fully on Solana using USDC

JPMorgan has completed a $50 million commercial paper issuance for Galaxy Digital Holdings on the Solana blockchain, marking one of the earliest transactions in which a major Wall Street bank has issued and serviced a securities instrument through a public blockchain.

Coinbase Global and Franklin Templeton purchased the short-term debt asset, and all payments tied to the issuance and redemption were settled using USDC, the dollar-backed stablecoin issued by Circle.

USDC settlement and on-chain security structure

JPMorgan developed the USCP token, which was a commercial paper issued by Galaxy Digital and organized the entire issuance process. The bank ensured that payment was made, along with the redemption proceeds, in full USDC. 

Scott Lucas, the head of Markets Digital Assets at JPMorgan, stated that the bank plans to expand its structure in the first half of next year by adding more investor groups, types of issuance, and security classes. Lucas commented that the bank has been experiencing interest from institutions interested in operational models that combine digital settlement mechanisms with short-term funding instruments.

In the case of Galaxy Digital, it is the first commercial paper offering. According to the firm, the on-chain structure provides access to an expanding collection of institutional investors who are incorporating blockchain-based tools into their portfolios. 

The structuring agent for the transaction was the investment-banking affiliate of the company, Galaxy Digital Partners LLC. Jason Urban, Global Head of Trading at Galaxy, stated that the release of commercial paper on the public blockchain aligns with the workflows the firm has been developing over several years. He added that the company considers the existence of public chains as capable of sustaining institutional-grade transactions related to capital market funding.

According to Franklin Templeton, the deal illustrates the institutionalization of blockchain issuance mechanisms. Sandy Kaul, Head of Innovation, remarked that every transaction made on the chain adds data and experience to the work to make tokenized financial instruments more regular.

Participants outline their roles as blockchain adoption expands

The Solana Foundation recognized its participation as the backbone network for the tokenized issuance. Nick Ducoff, Head of Institutional Growth, further added that institutional activities that involve predictable execution environments can be applied to the transaction.

The role of Coinbase was to be both an investor and a wallet. Brett Tejpaul, the Co-CEO of Coinbase Institutional, stated that the company offers custody and wallet services to the USCP token, as well as on- and off-ramp services to USDC, serving as a settlement tool. Coinbase’s direct involvement in the acquisition of the commercial paper was done on its balance sheet, and the company had to deal with the infrastructure of the key private-key management of the tokenized security.

Following the deal, JPMorgan stated that it will expand on the Galaxy Digital issuance, considering new structures for digital settlement workflows. The bank stated that the second stage of development will entail evaluating the potential application of similar models to other security categories, issuer profiles, and investor bases.

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