JPMorgan Chase & Co is using blockchain for collateral settlements, the latest Wall Street experimentation with the technology in the trading of traditional financial assets.
The bank’s first such transaction came on May 20, when two of its entities transferred the token representation of BlackRock Inc. money market fund shares as collateral on its private blockchain. The effort will allow investors to pledge a wider range of assets as collateral and use them outside of market operating hours, according to New York-based JPMorgan.
“What we’ve achieved is the friction-less transfer of collateral assets on an instantaneous basis,” Ben Challice, JPMorgan’s global head of trading services, said in an interview. While BlackRock wasn’t a counterparty, “they have been heavily involved since Day One, and are exploring use of this technology.”
Blockchain-based collateral settlement can be used for transactions such as derivatives and repo trading, as well as securities lending. In the...
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