Alibaba and JPMorgan Challenge Traditional Banks with Instant Blockchain Payments

Alibaba Group and JPMorgan Chase are set to revolutionize cross-border business-to-business (B2B) payments by launching a blockchain-based tokenized payment system by December 2025, aiming to eliminate intermediaries and accelerate transactions according to CNBC. The initiative, unveiled at the CoCreate Europe event in London, leverages JPMorgan's JPMD (JPMorgan Deposit Token) infrastructure, a blockchain platform designed to facilitate tokenized deposits backed by U.S. dollar and euro bank reserves. Alibaba's global B2B platform, Alibaba.com, will use this technology to enable near-instant settlements, reducing reliance on traditional banking networks that often incur high fees and delays.

The system will digitize fiat currencies, creating tokenized versions of the dollar and euro that can be transferred directly over a blockchain, bypassing the need for multiple intermediaries.

This approach addresses long-standing inefficiencies in cross-border trade, where transactions typically take 48–72 hours to settle due to currency conversions and layered banking processes. By tokenizing deposits - rather than relying on stablecoins - Alibaba and JPMorgan aim to ensure regulatory clarity and operational stability, though the company may explore stablecoins in the future according to Coindesk. JPMorgan's Kinexys blockchain platform, which already processes $2 billion in daily tokenized transactions, underpins the system.

Alibaba.com President Kuo Zhang emphasized the urgency of modernizing global trade workflows, calling the shift a "paradigm change" driven by AI and blockchain according to Incrypted. Alongside the tokenized payments, Alibaba is introducing AI-powered tools to further streamline operations. Agentic Pay, set to launch in December, will automate contract generation by converting buyer-seller conversations into enforceable agreements. Another feature, AI Mode, uses artificial intelligence to help buyers compare suppliers based on pricing, production capacity, and logistics, enhancing efficiency in complex global supply chains.

The collaboration reflects broader industry trends, as institutions increasingly adopt tokenization to modernize financial infrastructure. JPMorgan recently expanded its tokenization efforts by launching a deposit token on Coinbase's Base blockchain, while UBS and Ant International separately announced a blockchain-based partnership. Analysts suggest that Alibaba's system could handle billions in annual settlements once operational, positioning it as one of the largest real-world applications of tokenized fiat in B2B commerce.

Alibaba's initiative also aligns with its strategic investments in AI and digital trade. The company plans to monetize its AI tools through subscription models, including a potential $20/month or $99/year fee for AI Mode. Meanwhile, JPMorgan's involvement underscores confidence in tokenization as a mainstream financial tool, particularly as traditional banks compete with decentralized finance (DeFi) platforms.