BlackRock and Barclays Join J.P. Morgan’s Tokenized Collateral Network: A New Era in Finance

JP Morgan Chase debuts real world assets tokenization platform
JP Morgan Chase debuts real world assets tokenization platform

J.P. Morgan Chase has achieved a significant milestone with its Tokenized Collateral Network (TCN). The banking giant announced on October 10th that the network successfully facilitated its inaugural collateral settlement for a live client’s over-the-counter (OTC) derivative transaction.

In a statement provided to PYMNTS, J.P. Morgan revealed, “BlackRock and Barclays are now live on TCN, an application which resides on J.P. Morgan’s Onyx Digital Assets platform, operating as a private blockchain designed for tokenized asset movements, including collateral settlements.”

The release further explained that BlackRock has tokenized the representation of shares in a money market fund (MMF) through TCN. The use of blockchain settlement technology to transfer ownership of MMF shares is anticipated to enhance the functionality of MMFs and potentially bolster their resilience.

Ed Bond, J.P. Morgan’s head of trading services, emphasized, “The Tokenized Collateral Network represents a significant investment in the future of collateral markets. This inaugural transaction with BlackRock and Barclays illustrates the potential of tokenized assets, particularly in a collateral context. MMFs can now be mobilized and utilized in a more efficient manner, unlocking new pools of liquidity for margining.”

Earlier this year, J.P. Morgan expressed its commitment to the tokenization of traditional finance. As of April, the bank had processed close to $700 billion in short-term loan transactions via Onyx, a permissioned version of the Ethereum blockchain.

Tyrone Lobban, Onyx program head, conveyed, “We believe that tokenization is a game-changing application for traditional finance. If you consider private markets — encompassing private credit, private equity, and private real estate — they are nearly double the size of public markets, yet significantly less liquid, creating a substantial disparity.”

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