It may be crypto winter, but traditional financial institutions are sticking around and continuing to influence the space, says Ava Labs President John Wu.
Ava Labs operates Avalanche, a smart contract network designed around sustainability and speed that’s home to services for staking, lending, and trading cryptocurrency, including dapps SushiSwap and Aave. AVAX, up more than 9% over the last 24 hours, according to CoinMarketCap, now has a market cap in excess of $6 billion.
Wu said companies like JPMorgan Chase and Société Générale-Forge, a subsidiary of one of France’s largest investment banks, are examples of how financial institutions are still innovating during crypto winter and paving the way for broader crypto adoption.
“The institutions who are trying to apply the blockchain technology to either streamline or to do new tokenization of real world assets, their interest has absolutely not waned,” Wu told Decrypt at Avalanche House in Brooklyn on Friday.
JPMorgan already uses its own stablecoin, JPM Coin—backed 1:1 by the U.S. dollar—as a tokenized form of U.S. dollar deposits helping facilitate transactions for institutional clients. Wu sees the project as a notable on-ramp for institutional investors looking to ease into crypto.
He referenced recent efforts from JPMorgan with the Monetary Authority of Singapore and DBS Bank Limited, the multinational banking and financial services company, to set up a DeFi project around wholesale lending geared toward financial institutions.
“You have big massive asset management firms looking to get into using blockchain and crypto to tokenize assets,” Wu added.
Wu also mentioned a recent measure approved by decentralized stablecoin issuer MakerDAO, which approved $30 million in DAI lending to Société Générale-Forge. The company will pay for the loan by issuing “OFH tokens,” a digitized version of covered bonds backed by home loans and rated AAA by Fitch.
Right now, Ava Labs is working with a range of institutional clients that “runs the gamut,” said Wu, including asset management firms looking to get into using blockchain and crypto to tokenize assets, and family offices looking to get involved from an investing perceptive.
“It really goes up and down the spectrum,” he said. “The amount of stuff, for institutional purposes, has only increased.”
Editor's note: A previous version of this article referred to Avalanche as an Ethereum sidechain. We regret the error.