JPMorgan Launches Blockchain-Based Collateral Settlement for BlackRock
JPMorgan Chase & Co has introduced the first blockchain-based collateral settlement for BlackRock. The bank used its Tokenized Collateral Network (TCN) to convert shares in a money market fund into digital tokens, which were then transferred to Barclays as collateral for an over-the-counter derivatives trade between the two institutions.
BlackRock Completes Successful Collateral Settlement Using JPMorgan Blockchain
BlackRock has completed a collateral settlement trade with Barclays using JPMorgan’s Tokenized Collateral Network. The asset manager converted shares in one of its money market funds into digital tokens and transferred them to Barclays as collateral for an over-the-counter derivatives trade.
JPMorgan’s Onyx Allows Investors to Utilize Assets as Collateral
JPMorgan’s Onyx platform, which hosts the Tokenized Collateral Network, enables investors to use assets as collateral without physically moving them. However, adoption of blockchain technology in the financial industry is still relatively low.
Instantaneous Collateral Movement Increases Efficiency
Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, explained that using the bank’s blockchain network allows collateral to move almost instantaneously, compared to taking a day or longer through traditional processes. This technology has the potential to increase efficiency by freeing up capital locked in collateral for ongoing transactions.
Expansion of JPMorgan’s Blockchain Applications
JPMorgan Onyx is collaborating with other banks and central banks to streamline cross-border transactions and explore retail applications of blockchain-based systems and digital assets. The company has also introduced euro-based payments for corporate clients using its JPM Coin and is exploring a digital deposit token for faster cross-border settlements.
Hot Take: JPMorgan Pioneers Blockchain-Based Collateral Settlement for BlackRock
JPMorgan’s successful launch of the first blockchain-based collateral settlement for BlackRock demonstrates the potential of this technology in streamlining financial processes. By utilizing digital tokens and JPMorgan’s Tokenized Collateral Network, the collateral settlement process becomes faster and more efficient, benefitting both institutions involved. This development marks another milestone in JPMorgan’s ongoing efforts to expand its expertise in blockchain applications, with a focus on cross-border transactions and retail use cases. As more financial institutions recognize the advantages of blockchain technology, we can expect to see increased adoption and innovation in the industry.
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