JPMorgan uses blockchain to settle BlackRock, Barclays stock transactions

abdelaziz Fathi

JPMorgan Chase & Co., the largest US bank by assets, has executed its inaugural collateral settlement using blockchain technology as it aims to integrate the tech underlying cryptocurrencies into mainstream banking functions.

JPMorgan Chase

The settlement transaction involved BlackRock and Barclays, converting shares from one of its money market funds into digital tokens utilizing JPMorgan’s Ethereum-based Onyx blockchain and the bank’s Tokenized Collateral Network (TCN). These tokens were subsequently transferred to Barclays Plc, serving as collateral for an over-the-counter derivatives transaction between the two financial giants.

Following its debut, JPMorgan’s Tokenized Collateral Network (TCN) has seen a rapid evolution from its initial internal testing phase in May 2022. At that time, the bank transferred tokenized representations of shares from a BlackRock money market fund to serve as collateral on its private blockchain platform, Onyx Digital Assets.

This internal test laid the groundwork for TCN’s official launch. Ed Bond, head of trading services at JPMorgan, revealed to Bloomberg that since TCN has gone live, JPMorgan has already lined up a roster of other clients and transactions, indicating industry interest in the platform.

One of the standout features of TCN, as highlighted by Tyrone Lobban, is the sheer speed of collateral movement. Traditionally, collateral transfers could span an entire day. With TCN, this process is nearly instantaneous. JPMorgan envisions a transformative impact on the financial landscape if TCN is adopted more widely. The ability to quickly unlock capital, which would otherwise remain dormant, allows it to be repurposed as collateral in real-time transactions, exponentially increasing efficiency and liquidity in the market.

This move is seen by many in the financial sector as a testament to the increasing trust and acceptance of blockchain technology among institutional players. While blockchain is intrinsically associated with cryptocurrencies, its applications in various facets of banking and finance – from settlements to supply chain finance – are drawing increasing attention.

Elsewhere, JPMorgan is reportedly in the early stages of exploring a blockchain-based digital deposit token aimed at expediting cross-border payments and settlement processes.

While the lender has developed a big portion of the necessary infrastructure for this new payment method, it won’t proceed with the token’s development unless it receives approval from US regulators. If approval is granted, the US biggest bank by assets could potentially launch this product for corporate clients within a year of receiving regulatory clearance.

Meanwhile, there is growing speculation among market participants that U.S. regulators may be favoring established Wall Street firms while taking regulatory actions against crypto-native companies.

Read this next

Digital Assets

JPMorgan’s stablecoin ventures into interbank transactions

JPMorgan Chase & Co.’s proprietary digital token, JPM Coin, is set to expand its use case by facilitating interbank transactions on Partior, a blockchain ledger developed in collaboration with DBS Bank, Temasek, and Standard Chartered.

Retail FX

Interactive Brokers’ client base surges past 2.5 million

Interactive Brokers LLC (NASDAQ:IBKR) saw 1.89 million daily average revenue trades, or DARTS, in November 2023 compared to 1.93 million transactions in the prior month. The figure is three percent lower on a yearly basis, and also dropped slightly from a month earlier.

Executive Moves

Andrew Gibson launches TimberFX brokerage brand in Cyprus

After nearly two years at Tavira Securities as Head of Product Development, industry veteran Andrew Gibson is launching a new FX brokerage business based out of Cyprus.

Market News

US Dollar’s Trajectory Amidst Seasonal Trends and Economic Indicators in December 2023

As we traverse the final stretch of 2023, the noteworthy depreciation of the US dollar dominates the financial landscape

Inside View

Unlocking the Financial Potential of SMEs: Is FinTech the Key?

The rise of the gig economy for early-stage startups and freelancers has highlighted the increasing importance of small-scale business transactions and banking requirements. Unfortunately, this has also exposed a significant gap in the SME banking landscape.

Digital Assets

South Africa’s FSCA receives 138 crypto license applications

The Financial Sector Conduct Authority (FSCA) of South Africa is currently processing a slew of applications from cryptocurrency companies seeking operational licenses.


Exclusive Interview with Greg Rubin, Head of Axi Select: Unveiling the Future of Capital Allocation in the Financial World

Today, we are thrilled to kickstart another series of exclusive interviews with top executives in the financial services industry, hosted by our FinanceFeeds Editor-in-Chief, Nikolai Isayev. Our next guest is none other than Greg Rubin, the mastermind behind Axi Select.

Digital Assets receives UK’s EMI license, paving way for regulated expansion

Cryptocurrency exchange has been authorized as an Electronic Money Institution by the United Kingdom’s Financial Conduct Authority (FCA).

Digital Assets

Ripple’s Metaco joins Zodia Custody’s network for connectivity with Layers 0 and 1

“As the industry undergoes a pivotal transformation, our networked infrastructure is dedicated to standardise, govern and connect institutional digital asset flows — an essential step in forging use cases that transcend individual companies.”