- JPMorgan’s Tokenized Collateral Network (TCN) is officially live.
- BlackRock debuted the first settlement transaction.
- TCN opens up the crypto industry to institutional investors via blockchain technology.
United States banking giant JPMorgan Chase & Co. has officially debuted its blockchain-based collateral settlement solution, with BlackRock listed among the first key clients.
The solution is part of JPMorgan’s goal to lead the charge of traditional collateral tokenization, a nascent blockchain niche that has garnered the attention of banks, including Citi, which inaugurated its Token Services for cash management and trade finance on September 18.
The Tokenized Collateral Network (TCN)
JPMorgan’s Tokenized Collateral Network (TCN) leverages the bank’s Ethereum-based Onyx blockchain, which sits between a collateral provider and a collateral receiver to enable the parties to transfer tokenized ownership interests without moving the underlying assets.
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According to an October 11 Bloomberg report, BlackRock Inc. conducted the first public collateralized transaction moments after the network went live. It successfully transferred its money market fund shares into tokens to execute an over-the-counter (OTC) derivatives trade with Barclays.
Per the report, the transfer was near-instantaneous, and the transaction went through minutes after the fund’s Transfer Agent connected to the TCN network, marking the first use case of collateralized MMF shares between bi-lateral derivatives counterparts.
“The tokenization of money market fund shares as collateral in clearing and margining transactions would dramatically reduce the operational friction in meeting margin calls when segments of the market face acute margin pressures,” Tom McGrath, Deputy Global COO of the Cash Management Group at BlackRock., said.
JPMorgan’s Footprint in Blockchain Advocacy
Besides being an early pioneer of digital assets applications in the banking world, JPMorgan has been a proponent of blockchain technology for a while, and the TCN debut echoes the bank’s inspiration to create a bridge that connects institutional investors with decentralized finance platforms in the crypto industry.
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Since the inception of the Onyx blockchain, the network has processed over $3 billion in repo transactions, facilitating short-term borrowing in fixed income through the exchange of cash-based tokenized collateral.
Read how JPMorgan’s Chase Bank supports crypto payments:
Chase Bank Adds SHIB, XRP Among Others for Mortgage Payments
Stay updated on JPMorgan’s blockchain Euro payments:
JP Morgan Launches Blockchain Euro Payments Amid Institutional Crypto Push
