WSJ What’s News - JPMorgan Steps Into Fund Tokenization

Episode Date: October 30, 2025

P.M. Edition for Oct. 30. JPMorgan Chase said today that it tokenized a private-equity fund on its blockchain platform, an offering available to the wealthy clients served by its private bank. We hear from WSJ reporter Vicky Ge Huang about why the bank made this move, and whether others are making similar ones. Plus, earnings season continues, with companies including Amazon and Apple reporting strong quarterly results. And Prince Andrew is a prince no more—King Charles is stripping him of his royal titles. Alex Ossola hosts. READ: Arnold Schwarzenegger Has Become Gavin Newsom’s Toughest Opponent Yet Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Morgan's tokenized private equity fund is the bank's first step towards a broader rollout of its fund tokenization platform. There have been sporadic efforts by banks or asset managers to develop tokenized funds. So definitely this is kind of one of the hottest topics on Wall Street. Plus, data analysis firm Palantir is suing two former employees for allegedly stealing company secrets. And companies, including Apple and Amazon, report strong quarterly. results. It's Thursday, October 30th. I'm Alex O'Sullough for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We're exclusively reporting that J.P. Morgan Chase has tokenized a private equity

fund on its blockchain platform, an offering that is available to the wealthy clients served by its private bank. It's the first step in the bank's effort to make investing in alternative assets easier. Vicky Gugong covers crypto and retail investing for WSJ and it's here now with more. Okay, Vicky, what is tokenization? So tokenization is essentially the conversion of either financial assets or real-world assets into tradable tokens on the blockchain. And in this case, JP Morgan is converting the investors' ownership interest in this private equity fund. into a token on its own blockchain called Kinexas digital assets. Alternative investments as a whole is a pretty complex and often opaque space.

It includes private equity funds, private credit funds, real estate funds, or hedge funds. So these are usually the domain of elites, wealthy investors who can meet that investment minimum threshold to invest in these products. And for J.P. Morgan, they have an entire ecosystem of alternative investments participants within the bank itself. And for an alternative investment fund to work, it's actually a very complex and cumbersome process. There is a lot of documents involved, and fund managers usually have to do this thing called

capital call, where they call on the investor to actually send them the funds that they previously committed to invest. The good thing about the blockchain is that all the parties involved in the management of the funds and the investing of the funds and owning of the funds, all the parties involved in this process can see the real-time data and just having this helps people make decisions about the investment process. So it sounds like it's quite a lot of work to set this up, but once it's set up, it's not only advantageous for the customers, but also for the bank to not have to do those capital. calls, is that right? Yes, and as the bank itself has said, the goal really is to simplify the process for managing and investing in alternative investment funds because it can just be such a complex and cumbersome experience. Are other banks planning to get into tokenization of their own? Yes. Ever since the signing and passage into law of the Genius Act,

which establishes a regulatory framework for stable coins earlier, this. summer. There have been other sporadic efforts by other banks or asset managers to develop tokenized funds. So definitely this is kind of one of the hottest topics on Wall Street since the signing of the bill. Does tokenization come with any downsides besides just the headache of setting it up? Skeptics have warned that tokenization brings some of the risks of the blockchain world into the traditional finance world. For example, our reporting has shown that so far, some of the tokenized stocks, they can trade a dramatically different prices than the actual stocks themselves.

So the price discrepancy and lack of liquidity sometimes can cause some other issues as well. That was WSJ reporter, Vicki Gahuan. Thank you, Vicki. Thank you for having me. Today, federal reserve officials, announced internally that the central bank would be reducing the staff of its banking supervision arm by 30% by the end of next year. That's according to an internal memo seen by the Wall Street Journal, which also said that the reductions would leave the Fed's supervision and regulation

division with about 350 people, down from a previously authorized headcount of 500. The cuts were announced by the Fed's new top regulatory official, Vice-Chair Michelle Bowman, during a morning meeting. And data analysis firm Palantir is suing two of its former employees, alleging that they engaged in deception and theft to help build a competing artificial intelligence company. In a lawsuit filed today in the Southern District of New York, Palantir alleged that Radha Jane and Joanna Cohen violated their non-competition agreements after leaving the company and working on a copycat business called Percepta, which is owned by the venture capital firm General Catalyst. Palantir further alleged that Cohen stole a set of highly confidential documents

before departing. General Catalyst, Jane, and Cohen didn't immediately respond to requests for comment. Coming up, what the biggest stock market debut since the start of the government shutdown shows about the U.S. IPO market. That's after the break. Shares of software company Navon fell 20% in its stock market debut today, as it became the largest company to go public during the government shutdown that started on October 1st and has stalled other new listings. At its IPO price, Navon's market value was around $6.2 billion, and it raised roughly $920 million for the company and selling shareholders. It's the biggest company so far to stage an initial public offering using a workaround provided by the Securities and Exchange Commission. Corey Dreebush covers capital markets for the journal and joins me now. Corey, what is this workaround process that Navan is using?

So during normal times, when companies want to go public, they will submit a registration filing with the SEC. Then officials at the SEC will deem it effective. During the government shutdown, those people who work at the SEC who would give that stamp of approval have all been furloughed. We entered the shutdown with a pretty hot run of IP. So to enter into a shutdown now of all times was very concerning to bankers, to lawyers, and to the SEC. So about a week into the shutdown, the SEC did something unusual. They said that if you file a registration statement with a price range, it will automatically become effective 20 days after you file the initial price range.

You don't need an individual person at the SEC to give it the approval. Will this slow the momentum that the IPO market was gaining before the shutdown? It already has. Usually companies that are going public would file their registration statement with their price range. And five to seven days later would list shares. 20 days is about three weeks time. That's a really long time. Especially right now, the stock market is pretty volatile. So to be out there, that's really scary for a company. It is a gamble. That was WSJ reporter, Corey Dreybush. Thank you, Corey. Thank you so much. Have a great thing. day. Major U.S. indexes were down today as tech shares lost ground. The NASDAQ fell about 1.6%. The S&P 500

dropped about 1% and the Dow dipped about 0.2%. The busy earnings week continues as a number of other companies report on their recent quarters. Here are the results from three of the biggest companies reporting today. Apple reported record September quarter sales, powered by strong consumer demand for the new iPhone 17 and continued growth in its services business, which surpassed $100 billion in revenue for the year. Total revenue came in at $102.5 billion for the quarter, about 8% higher than the year ago period and slightly above Wall Street's expectations. Amazon reported rising revenue and profit for the third quarter, propelled by strong retail sales as well as continued growth in its cloud computing and artificial intelligence business. Revenue from

Amazon Web Services, the source of much of the company's profits, reported that sales climbed 20% in the three-month period. And healthcare company Cigna logged higher profit and revenue in the third quarter, but warned that profits for its pharmacy benefits business will be squeezed next year. Cigna shares closed about 17% lower, signaling investment. concern. In international news, European Union Data Agency Eurostat said today that the Eurozone's GDP increased 0.2% in the three months through September. That was a little better than economist's expectations, but still reflects the drag on economic growth from weaker exports

to the U.S. after President Trump ramped up tariffs at the start of the second quarter. Separately, the European Central Bank held its key interest rate at 2% for the third meeting in a row. It was widely expected by investors. The decision came a day after the Federal Reserve cut rates for the second time this year. The diverging policy paths threatened to complicate the ECB's job by driving up the value of the euro, adding further pressure onto the bloc's exports at inflation. And Prince Andrew is a prince no more. After years of damaging headlines over his friendship with Jeffrey Epstein and allegations that he sexually abused one of Epstein's victims,

Andrew will be stripped of all his titles and kicked out of the 30-room Windsor mansion he currently lives in. Buckingham Palace said he will now be known simply as Andrew Mountbatten Windsor, and he will be relocated to a house on the Sandrigam estate, which the monarch privately owns. Prince Andrew denies allegations of abuse, but palace officials said that there had been serious lapses of judgment on his behalf. And finally, Tuesday is Election Day in the U.S. And while it's not a national election year, ballots across the country will carry a number of state and local measures. In California, one of those is Proposition 50, a state ballot measure that would bring back gerrymandering to favor Democrats. It's meant to counter Texas's move to redraw voting districts, which created five likely GOP House seats at President Trump's behest.

California Governor Gavin Newsom has championed the measure, which its supporters have dubbed the Election Ringing Response Act. Here he is last month on a live stream hosted on his podcast. We did this in response to what Donald Trump has done, and we've done it in closing, Brian, in the most democratic way. And I would say that to those still on the fence. That's the difference between us and them. We're not only using our formal authority, our ability to fight fire with fire and redistrict, but we're using our moral authority in this respect. It's temporary, it's transparent, and it's democratic.

But one person who opposes the measure is former governor, Arnold Schwarzenegger. About two decades ago, when he was the governor of California, Schwarzenegger led efforts to build California's anti-Gerrymandering framework, and he doesn't want to see it dismantled. He recently spoke with Wall Street Journal reporter Jim Carleton at the West Coast Customs Car Shop in Burbank. I believe that competition creates performance. If the Democrats and the Republicans have a fair competition,

then the people of America will benefit because they will try to outperform each other. But when you draw the district lines, the politicians don't have to perform at all. Opponents of the redistricting measure face an uphill battle. Polls show Prop 50 support rising, as Election Day nears, and it's backed by Democratic luminaries like Barack Obama and Representative Alexandria Ocasio-Cortez. To read more of Jim's profile of Arnold Schwarzenegger, check out WSJ.com. We'll leave a link in the show notes. And that's what's news for this

Thursday afternoon. Today's show is produced by Pierre Bienname and Zoe Colkin, with supervising producer Yolanda McBride. I'm Alex Oslov for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Thank you.