JPMorgan Leads the Way with First Live Blockchain Collateral Transaction

JPMorgan has achieved a significant milestone with its inaugural live blockchain-based collateral settlement transaction, partnering with BlackRock and Barclays.

Utilizing JPMorgan’s Ethereum-based Onyx blockchain and the Tokenized Collateral Network (TCN), BlackRock tokenized shares from a money market fund, swiftly transferring them to Barclays for use as collateral in an over-the-counter derivatives trade.

The tokenization of traditional financial assets is a pivotal advancement for the banking sector, with JPMorgan at the forefront of this trend, alongside other major players like Citi.

This swift tokenization process, which occurred within minutes through seamless connectivity between the fund’s Transfer Agent and TCN, marks a groundbreaking achievement for BlackRock, J.P. Morgan, and Barclays.

It signifies a novel approach to using money market fund shares as collateral between bilateral derivatives counterparties.

Tyrone Lobban, JPMorgan’s Head of Onyx Digital Assets, highlighted the advantages of this innovation: “Onyx Digital Assets already enables clients to access intraday liquidity via repo transactions. Now with the launch of TCN, clients can benefit from additional utility from their MMF investments by posting tokenized MMF shares as collateral—a faster, more cost-effective way of meeting margin requirements.”