JPMorgan — a luminary in the international banking sector — has recently completed a revolutionary blockchain collateral settlement between two other financial titans: BlackRock and Barclays.
Leveraging JPMorgan’s custom Ethereum-based blockchain ‘Onyx’ and its ‘Tokenized Collateral Network’ (TCN), BlackRock turned shares from one of its money market funds into digital tokens.
Notably, BlackRock then passed these virtual assets to Barclays Plc, where they were utilized as collateral in an over-the-counter derivatives trade.
Exploring Onyx and TCN
Formed in 2020, Onyx is the JPMorgan blockchain that changes how finances and information move in banking, leveraging Web3 technology to speed up transfer processes and make them faster.
The platform aids financial entities solve real-world problems using smart networks, making international business smoother and more secure through Ethereum-based equipment. Systems on the platform include ‘Liink’ for sharing data, ‘Coin Systems’ for digital money transfers, and ‘Onyx Digital Assets’ for swapping virtual tokens.
On the other hand, JPMorgan’s TCN is an innovative application enabling investors to leverage their assets as collateral without physically transferring them across ledgers, starting with money market funds.
TCN offers numerous advantages, like enhancing collateral options, ensuring precise ownership tracking, automating reconciliation, and facilitating fast and cost-efficient collateral transfers.
It also enables real-time ownership transfers and smooth integration with other applications in the Onyx Digital Assets ecosystem.
Innovating Traditional Financial Transactions
BlackRock’s transaction with Barclays, facilitated by the seamless interfacing between the fund’s Transfer Agent and JP Morgan’s TCN, highlights more than a tech-savvy financial transfer — it signifies a shift toward utilizing blockchain to empower transactional security, speed and transparency.
“Using the bank’s blockchain network, Onyx Digital Assets, meant the collateral moved almost instantaneously, compared with over the course of a day. At scale, the technology would increase efficiency by freeing up locked capital so that it could be used as collateral in ongoing transactions.”Tyrone Lobban, Head of Onyx Digital Assets, commented in a press release
Ultimately, with BlackRock and Barclays integrating the JPMorgan blockchain and Web3 application, the stage is looking bright for widespread integration and adoption of such technology in the traditional financial landscape.