JPMorgan completes first live blockchain collateral settlement with BlackRock, Barclays

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JPMorgan completes first live blockchain collateral settlement with BlackRock, Barclays

JPMorgan said today that it had completed its first live blockchain-based collateral settlement transaction with BlackRock and Barclays.

BlackRock tokenized shares in one of JPMorgan's money market funds by using its Ethereum-based Onyx blockchain and the bank's Tokenized Collateral Network. The tokens were then transferred to Barclays Plc for collateral in an OTC derivatives trade.

The tokenization of traditional financial assets is a major challenge for banks, and it's an area JPMorgan has been leading the charge with, now joined by the likes of Citi and others.

Tokenization happened within a matter of minutes through connectivity between the fund's Transfer Agent and TCN, JPMorgan said in a press release. The transfer between Blackrock and Barclays was nearly instantaneous and represents a first for BlackRock, J.P. Morgan and Barclays, where the shares in MMFs are used as collateral between bi-lateral derivatives counterparts.

Tom McGrath, a deputy global COO of BlackRock's Cash Management Group, added: ''It's a tough decision to make and I'm not confident it's going to be easy,'' he said.