By
Temitope Olatunji
April 26th, 2024
The move signals a major stride on the part of JPMorgan as it intensifies its efforts towards boosting the commercial applications of blockchain technology.
United States’ largest bank by assets, JPMorgan Chase & Co may have started using its blockchain-based collateral settlement for customers. This follows after a recent transaction between BlackRock Inc and Barclays Plc saw the duo use JPMorgan’s Tokenized Collateral Network (TCN) to effect the trade.
According to Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, BlackRock had used TCN to turn some shares into digital tokens before transferring the same to Barclays as collateral in an over-the-counter (OTC) derivatives deal the duo had going on. Lobban shared this while speaking in an interview with Bloomberg.
Meanwhile, the move signals a major stride on the part of JP Morgan as it intensifies its efforts towards boosting the commercial applications of blockchain technology.
JPMorgan Redefining Blockchain Technology in Finance
For what it’s worth, it is rarely seen that a bank develops a blockchain app. However, JPMorgan may be setting the pace in that area. That is even though the volumes, for now, are still tiny in comparison to the bank’s overall business.
For context, Wall Street firms have spent nearly a decade looking for ways to simplify some of their more complex processes using blockchain technology. However, the limited number of applications being used commercially makes one wonder whether the technology has any real-life applications in finance.
Now though, it appears that previous barriers in terms of complexity may be broken. According to JPMorgan’s Lobban, using the bank’s blockchain network Onyx Digital Assets, the collateral moved almost instantaneously. Thus, creating a better experience than before that one had to wait for an entire day.
With the app, JPMorgan hopes to eventually allow clients to use other assets as collateral. As Ed Bond, head of trading services at JPMorgan says, clients will eventually be able to use equities and even fixed income as collateral. To this end, Bond noted in an interview:
“Institutions on the network can use a wider scope of assets to meet any collateral requirements they have on the back of trading.”
Other Banks Are Keen on Floating Blockchain Projects
Meanwhile, just as JPMorgan is pushing, many of its biggest rivals also appear to be highly invested in blockchain and digital-asset projects.
Goldman Sachs Group Inc, for instance, unveiled its digital-asset platform last November. Whereas, asset managers, including Franklin Templeton, have also shown keen interest in using blockchain technology to process transactions for their funds.
