JPMorgan Is Using Blockchain for Collateral Settlement

Key Takeaways

JPMorgan has begun to make use of blockchain for collateral settlements, starting with a pilot transaction carried out final week.
The transaction concerned belongings from BlackRock, which was circuitously concerned within the transaction as a counterparty.
Although JPMorgan has embraced blockchain for institutional use, its CEO, Jamie Dimon, stays essential of Bitcoin.

JPMorgan is utilizing blockchain expertise for collateral settlements, based on new experiences from Bloomberg.

Transaction Concerned BlackRock Belongings

In a pilot blockchain transaction, JPMorgan Chase & Co. transferred tokenized cash market fund shares (a kind of mutual fund) as collateral on Friday, Could 20.

The transaction concerned belongings from BlackRock, the world’s largest asset supervisor. Blackrock was circuitously concerned within the transaction as a counterparty. Nevertheless, Blackrock has been “closely concerned since Day One” and continues to be exploring blockchain expertise based on Ben Challice, JPMorgan’s world head of buying and selling companies.

The innovation will permit traders to make use of a greater diversity of belongings as collateral and perform transactions outdoors of market hours. Challice famous that the transaction achieved a “friction-less switch of collateral belongings on an instantaneous foundation.”

JP Morgan additionally plans to broaden tokenized collateral to incorporate equities and glued earnings, based on at this time’s report.

JPMorgan’s Earlier Blockchain Efforts

JP Morgan has been closely concerned in blockchain over the previous a number of years and has created numerous merchandise.

It launched Quorum, an enterprise model of Ethereum in 2016. Quorum was acquired by ConsenSys in August 2020. Following that sale, JP Morgan launched a brand new inside blockchain product known as Onyx and its personal inside stablecoin in October 2020.

JPMorgan additionally started to make use of blockchain for transactions associated to repurchase borrowing in 2020. In response to Bloomberg, greater than $300 billion of worth has been dealt with by means of these transactions, a few of which concerned Goldman Sachs.

Regardless of the corporate’s latest willingness to embrace blockchain expertise for institutional functions, it has additionally turn into notorious for CEO Jamie Dimon’s long-standing hostility towards Bitcoin. Dimon has at instances known as Bitcoin a “fraud” and “nugatory”, however extra lately has conceded that there’s consumer demand for it.

Yesterday, an investor be aware from JPMorgan positioned Bitcoin’s truthful worth at $38,000—increased than its present worth of $29,300.

Disclosure: On the time of writing, the writer of this piece owned BTC, ETH, and different cryptocurrencies.

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