JP Morgan Unveils Blockchain-Based Collateral Network to Revolutionize Traditional Settlements
Summary:
JP Morgan has launched its blockchain-based collateralization platform, called the Tokenized Collateral Network (TCN) on Oct. 11. This platform lets investors use assets as collateral and transfer collateral ownership using blockchain technology. In its first public transaction, JP Morgan and BlackRock tokenized shares of a money market fund and transferred them as security to Barclays Plc. TCN aims to streamline the process of settling traditional settlements on a blockchain, easing the movement of collateral and offering clients access to intraday liquidity.
Unveiled on October 11, JP Morgan, the American banking behemoth, introduced its new blockchain-based collateralization platform, the Tokenized Collateral Network (TCN), as announced by Bloomberg. Asset management titan BlackRock was the recipient of the first trade via TCN. The application of TCN enables investors to use assets as collateral and swap ownership of collateral through blockchain technology without the necessity of shifting assets on originary ledgers.
The maiden public collateralized transaction on the TCN network featured JP Morgan and BlackRock swapping digital tokens symbolizing shares from one monetary fund to Barclays Plc. These tokens became a means of security for a bilateral derivatives deal between both corporations. JP Morgan conducted the inaugural internal testing of TCN in May 2022, and a series of clients and transactions are currently awaiting their turn since TCN went live.
JP Morgan's pioneering tokenization network was designed with the intent to simplify and expand the settlement process of traditional settlements using a blockchain-based system. Owing to the adoption of decentralized technology, the technique of settlement became quicker, safer and streamlined.
Tyrone Lobban, the leader of Onyx Digital Assets at JPMorgan, stated that the fresh TCN platform liberates capital previously immobilized, allowing it to be lent as collateral in future trades. This technological upgrade is likely to bolster efficiency to a considerable extent. With the help of this platform, it is now feasible to produce, transmit, and reconcile tokenized conventional assets in near real-time, a significant improvement over previously used methods.
With the introduction of this blockchain platform, the bank's clientele can now gain access to intraday liquidity via a secure repo transaction, employing tokenized collateral, rather than relying on highly-priced unsecured credit lines. Clients who consent to the blockchain-powered trade are given a unique node with which they can reconcile trades and have access to various reports.
Moving past its initial skepticism towards decentralization, the American banking titan has significantly progressed and is currently exploring and unveiling an array of services focused on blockchain and cryptocurrencies due to increasing demand. In June this year, the bank successfully employed a blockchain-enabled solution to settle trades with Indian banks.
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Published At
10/11/2023 10:48:51 AM
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