Kinexys by J.P. Morgan Releases a Proof-of-concept Focused on the Financial Sector Leveraging Zama’s Privacy-Preserving Solutions

Zama is happy to announce a successful proof-of-concept for its Fully Homomorphic Encryption (FHE) technology in J.P. Morgan’s Kinexys (formerly known as Onyx by J.P. Morgan). The proof-of-concept, part of ‘Project EPIC: Fueling tokenized finance with onchain enterprise privacy, identity, and composability,’ took place in the Kinexys Digital Assets sandbox (previously Onyx Digital Assets). Read the whitepaper here. 

Privacy in financial transactions: the next frontier

The financial industry faces increasing demand for privacy while maintaining regulatory compliance, especially as tokenized assets move onchain. Traditional systems often expose sensitive transaction details, such as bid amounts and investor holdings, risking the confidentiality that institutional clients require. With Project EPIC, J.P. Morgan’s Kinexys demonstrates how FHE can address these concerns, unlocking new possibilities for privacy-preserving asset management.

Transformative use cases for institutional investors

Zama’s FHE technology enables encrypted transactions across key use cases:

• Fund Subscription: Investors can subscribe to multiple funds with fully encrypted transaction amounts, ensuring confidentiality.
• Secondary Market Trading: Fund tokens can be traded in secondary market auctions without disclosing bid values, supporting blind pool trading with complete privacy.
• Atomic Settlement: Zama’s FHE technology facilitates Delivery-versus-Payment (DvP) settlements with encrypted values, protecting both parties’ data while enabling secure, instant settlement.
• Encrypted KYC/AML Compliance: By integrating Kinexys’ Self-Sovereign Identity (SSI) SDK with Zama’s FHE technology, financial institutions can securely verify investor identities to meet KYC/AML requirements without revealing personal data to validators or third parties.

Enhancing onchain confidentiality with Zama’s fhEVM

At the heart is Zama’s fhEVM, a sophisticated encryption solution that integrates with Ethereum-based smart contracts. Through the fhEVM, institutional investors maintain full control over their data, enabling validators to execute transactions without decrypting any information. This ensures that even platform operators cannot access sensitive details—an essential feature in multi-party financial ecosystems where data privacy and integrity are critical.

A new era of privacy in digital asset finance

Rand Hindi, Zama’s co-founder and CEO, underscores the importance of privacy-preserving finance: “Our FHE technology enables private trading while ensuring regulatory compliance. Investors can participate in fund auctions without revealing bid amounts and transfer fund tokens with secure position sizes, fostering a trading environment that respects their privacy.”

This proof-of-concept further highlights the scalability of Zama’s fhEVM protocol for various financial applications, including blind pools, confidential auctions, and encrypted settlements. With the ability to encrypt transaction values and identities, financial institutions can expand their onchain asset offerings without sacrificing privacy or facing regulatory hurdles.

Looking ahead: privacy and composability in institutional finance

As digital assets evolve, Project EPIC emphasizes the crucial role of privacy and identity composability in the future of onchain finance. Zama’s FHE solutions lay the groundwork for institutions to confidently adopt tokenized assets, aligning with emerging privacy standards and regulatory needs.

Additionnal links

• Read the full report here.
• Star the fhEVM Github repository to endorse our work.
• Read the fhEVM documentation.
• Get support on our community channels.

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