By
Temitope Olatunji
April 16th, 2024
Though new, the Onyx Digital Assets platform is gradually gaining a fair market share of the repo market that is currently dominated by the US Government, thanks in part to the embrace from financial giants utilizing it.
French international banking giant BNP Paribas SA (EPA: BNP) has joined the Onyx Digital Assets network, a platform launched by the American investment banking giant JPMorgan Chase & Co (NYSE: JPM) to help financial services providers exchange different kinds of valuable assets without digging into their own cash reserves.
As reported by the Financial Times, BNP Paribas will now have access to short-term trading in the fixed income markets, joining hands in harnessing unique possibilities in the more than $12 trillion market with blockchain technology. The access BNP Paribas now has to the Onyx Digital Assets platform will now permit the French outfit to lend out US government bonds for a few hours without the bonds leaving their balance sheet.
The Repurchase or ‘repo’ market is a very important one as it helps the government to exert its monetary policies and is a crucial revenue generation avenue for financial services providers across the board. In addition to serving as an outlet for government economic control, banks can borrow high-quality assets for a couple of days which can be used to finance their derivatives trading or other cash printing engagements.
The fixed asset market represents one of the ways blockchain technology is gaining deep expression in the financial world. There have been quite a number of ways banks have been looking to deploy blockchain capabilities beyond exposing clients directly to holding digital coins as investments.
Since JPMorgan Chase deployed the Onyx Digital Assets platform, a total of $300 billion worth of trades has been conducted thus far, a clear highlight of how the platform is providing value for associated institutions. The outrightly bullish utilization of blockchain tokenization by JPMorgan is, however, antagonistic to the views of Jamie Dimon who once said Bitcoin (BTC) and other flagship assets in the blockchain space are not his cup of tea.
BNP Paribas Is One of Many Banks that Have Joined Onyx
Though new, the Onyx Digital Assets platform is gradually gaining a fair market share of the repo market that is currently dominated by the US Government, thanks in part to the embrace from financial giants utilizing it including but not limited to Goldman Sachs Group Inc (NYSE: GS).
JPMorgan is even more ambitious in its pursuit to tokenize key aspects of the financial world.
“This is not just proof of concept work, we see this as part of our efforts to utilize the technology for the whole trading and operations lifecycle as the market evolves,” said Joe Bonnaud, global markets chief operating officer and head of engineering at BNP Paribas.
Besides its deployment to the repo market, JPMorgan also has plans to integrate decentralized finance (DeFi) products that can further grant its institutional clients more connections to the digital assets world as confirmed by Tyrone Lobban, head of Onyx Digital Assets at JPMorgan.
In all, the bank said it wants to expand the eligibility criteria of the Ony platform beyond the US bond market.