JPMorgan has accomplished its first blockchain-based collateral settlement transaction involving BlackRock and Barclays, the US banking big stated on Wednesday. JPMorgan’s Ethereum-based Onyx blockchain and the financial institution’s tokenized collateral community (TCN) had been utilized by BlackRock to tokenize shares of one in every of its cash market funds (MMFs). The tokens had been then transferred to Barclays Plc as collateral in over-the-counter derivatives buying and selling.
Tokenization of conventional monetary belongings is necessary for banks, and it’s an space the place JPMorgan is main the best way. Tokenization occurred inside minutes because of a connection between the fund’s switch agent and TCN, JPMorgan stated in a press launch. The switch between Blackrock and Barclays was virtually instantaneous and represents the primary time for BlackRock, JPMorgan and Barclays that MMF shares are used as collateral between bilateral derivatives counterparties, it stated.
The top of Onyx Digital Belongings at JPMorgan famous that Onyx Digital Belongings already permits purchasers to entry intraday liquidity by means of repo transactions. Now, with the launch of TCN, purchasers can additional profit from their MMF funding by posting tokenized MMF shares as collateral – a quicker and cheaper approach to meet margin necessities.
Picture: ABC Information