JP Morgan's blockchain chief says '99.9 percent' of conversations about traditional financial instruments

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JP Morgan's blockchain chief says '99.9 percent' of conversations about traditional financial instruments

Tyrone Lobban, the head of JP Morgan's blockchain division, told guests at CCData's Digital Asset Summit in London that '99.9 percent' of his conversations with clients are about tokenized forms of traditional financial instruments, not crypto.

To date, the investment banking giant has utilized it to tokenize traditional securities for instantaneous exchange.

Lobban, speaking at CCData, said that U.S. banks wanting to use public blockchains face various bureaucratic hurdles and red tape due to the current regulatory climate.

JP Morgan founded Onyx, a private blockchain based on Ethereum, to circumvent this.

Other financial institutions that operate nodes and tokenize assets on Onyx right now include Goldman Sachs, DBS, BNP, and others.

JP Morgan has credit lines that it extends to institutional clients as an investment bank. This process can be especially costly for some clients, as JP Morgan's credit line is free-to-use, borrowers still need to hold enough assets to prove to regulatory authorities that they can meet their obligations in times of stress or when the bank withdraws its credit line.

Lobban adds that JP Morgan's clients have been able to enter repurchase agreements-called repos- where they put up collateral in the form of tokenized treasuries to borrow against.

Lobban says he's able to use smart contracts to ensure the delivery versus the payment, the exchange of assets for cash at the right time, and we can be very precise with the trade terms that both parties are agreeing to.