JPMorgan Executes First Blockchain Collateral Settlement in BlackRock-Barclays Trade
JPMorgan used its own permissioned blockchain to enable BlackRock to convert shares from one of its money market funds into digital tokens.
By: Camila Russo •
JPMorgan Chase, the largest US bank by assets, launched its first collateral settlement for clients via a blockchain network. This milestone development was reported by Bloomberg News.
JPMorgan used its own closed system, the "Tokenized Collateral Network" (TCN), to enable BlackRock to convert shares from one of its money market funds into digital tokens.
These tokens were then transferred to Barclays as collateral for an over-the-counter derivatives trade between the two leading financial institutions.
Blockchain networks eliminate intermediaries and can reduce the time and cost of transactions. By offering an immutable and auditable record, they also reduce procedural risks and increase transparency.
The bank’s blockchain network Onyx Digital Assets allowed collateral to move almost instantaneously, Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, said cited by Bloomberg.
The bank wants to open the system to other types of collateral, including equities and fixed income, according to Ed Bond, head of trading services at JPMorgan.
The bank made its first DeFi trade in November 2022, and first tested its TCN network in May.