Not long ago, Jamie Dimon dismissed crypto as nothing more than “decentralized Ponzi schemes.” Now, his bank, JPMorgan Chase, sees a multi-trillion-dollar industry in the making and is aggressively laying the groundwork for a future dominated by decentralized finance (DeFi).
In fact, Dimon himself has changed his tune, acknowledging that blockchain and stablecoins are “real” technologies. This isn’t just talk either as the banking behemoth is building the pipes it thinks will power a market of staggering size.
All about JPMorgan’s new strategy
JPMorgan’s strategy boils down to merging Wall Street’s old guard with DeFi’s new tech. They aim to use tokenization and institutional-grade DeFi to inject life and cash into market. First though, they must find a way through the minefield of regulation and security that keeps the whole sector on shaky ground.
The entire bet hinges on a single idea – Tokenizing real-world assets (RWAs). By turning things like real estate, private art collections, and company equity into digital tokens on a blockchain, the bank believes it can unleash a tidal wave of value.
Forecasts, including some from the Boston Consulting Group that JPMorgan has pointed to, claim the market for tokenized assets could rocket to $16 trillion or more by 2030.
A report from JPMorgan’s own Onyx division and Bain & Company claims the alternatives industry alone could generate an extra $400 billion in annual revenue just by giving wealthy clients a way in. The logic is simple. Tokenizing an illiquid asset, like a stake in a private company, makes it tradable, opening it to more buyers.
Smart contracts can handle the messy back-office work of paying dividends and ensuring compliance automatically. It also allows for fractional ownership, meaning someone could buy a small piece of a high-value asset that was previously out of reach.
This isn’t just theory. JPMorgan’s Onyx Digital Assets platform has already handled billions in transactions. Through a Singaporean government collaboration called Project Guardian, the bank proved it could tokenize assets for wholesale funding. In a trial with investment firm Apollo, they even used the Axelar network to demonstrate how a tokenized portfolio could manage itself across different blockchains – A key step toward making separate financial systems talk to each other.
However, for every dollar of potential, there’s a mountain of risk. The road to a multi-trillion-dollar DeFi market is blocked by regulatory confusion and the constant threat of being hacked.
East or West, regulations are everywhere!
Regulators worldwide can’t agree on a single set of rules. The European Union’s Markets in Crypto-Assets (MiCA) regulation, which came into force in late 2024, provided some clarity but created new problems. It left a gray area around “fully decentralized” protocols, potentially pushing innovation toward safer, more centralized systems.
In the United States, a chaotic “regulation by enforcement” approach from the SEC and CFTC has left companies guessing.
Meanwhile, global bodies like the Bank for International Settlements (BIS) are sounding the alarm, warning that crypto is now big enough to destabilize traditional finance if the two become too intertwined.
Hacks, security, and ‘bleeding money’
The security situation is even more dire. DeFi is bleeding money. In the first half of 2025, hackers stole over $3.1 billion, more than in all of 2024. The attacks are getting smarter, with thieves now focusing on off-chain weak points like stolen private keys and website takeovers, which made up over 80% of losses in 2024.
Even well-known platforms aren’t safe, as shown by a $42 million hack of GMX and a $220 million theft from Cetus on the Sui network in 2025. The ghosts of massive past heists, like the $610 million Poly Network attack and the $625 million Ronin Bridge exploit, loom large.
Upgrades and what should you expect next?
None of this happens if the technology can’t handle the load. The current infrastructure, mostly running on Ethereum, is often sluggish and expensive. To support trillions in value, it needs to grow up fast. A few key upgrades are paving the way.
Layer 2 scaling solutions like Arbitrum, Optimism, and ZK-rollups act like express lanes, bundling transactions to make them faster and drastically cheaper. Ethereum’s own EIP-4844 update in 2025 gave these networks a massive boost, lowering their costs and making them the center of DeFi activity.
Zero-Knowledge Proofs (ZKPs) are seen as the key to getting big institutions on board. This tech lets a company prove something is true—like having enough collateral for a loan—without revealing the sensitive data behind the proof on a public blockchain. It’s confidentiality for a system that’s radically transparent.
Finally, to attract everyday users, the wallet experience has to be simpler and safer. Account abstraction, through standards like ERC-4337, is replacing complicated seed phrases with smart-contract wallets. This allows for features people already know, like password recovery, two-factor authentication, and paying transaction fees with different kinds of tokens.
The irony is thick. The bank that once called crypto a fraud is now building its plumbing. JPMorgan is actively constructing its vision of a $5 trillion DeFi market, betting that tokenized assets and robust infrastructure can create a more open and fluid financial system.
It’s a calculated risk that the world of finance can be rebuilt on a foundation of code, but the ground is still shaking.