JPMorgan Launches Tokenization Network, Mints BlackRock Fund Tokens
The platform was initially tested internally in May 2022 and has now gone live.
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JPMorgan announced today the launch of its tokenization platform, the Tokenized Collateral Network (TCN), built on JPMorgan’s Onyx blockchain. TCN recently settled its first trade between financial giants BlackRock and Barclays.
The platform represents a significant step forward in streamlining securities settlement between major institutions. By tokenizing assets on a blockchain, TCN aims to allow instant transfer of collateral rather than taking up to a day through traditional settlement channels.
BlackRock used TCN to tokenize shares in one of its money market funds and transfer them to Barclays as collateral for an over-the-counter derivatives trade between the two companies.
“Tokenization of money market fund shares as collateral in clearing and margining transactions would dramatically reduce the operational friction in meeting margin calls,” said Tom McGrath, chief operating officer of the cash management group at BlackRock.
JPMorgan plans to expand the scope of assets used as collateral between institutions, including equities and fixed income.
“Institutions on the network can use a wider scope of assets to meet any collateral requirements they have on the back of trading,” said Ed Bond, head of trading services at JPMorgan.
The launch represents the latest blockchain innovation from JPMorgan after the introduction of its JPM Coin digital currency for wholesale payments. As of June 2022, JPM Coin has facilitated over $300 billion in transactions since its launch in 2019.
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