United States banking giant JPMorgan has officially unveiled its innovative in-house blockchain-based tokenization platform, known as the Tokenized Collateral Network (TCN), with a successful first trade featuring asset management behemoth BlackRock. The
TCN is designed to revolutionize the financial industry by facilitating the conversion of traditional assets into digital assets and streamlining on-chain settlements, offering increased efficiency and security.
The Tokenized Collateral Network allows investors to employ their assets as collateral, leveraging the power of blockchain technology to transfer ownership seamlessly without the need to physically move assets across various ledgers. In the inaugural public collateralized trade, JPMorgan and BlackRock utilized the TCN to transform shares of a money market fund into digital tokens. These tokens were subsequently transferred to Barclays bank to serve as security for an over-the-counter derivatives exchange between the two financial giants.
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JPMorgan conducted its first internal TCN test in May 2022, and with TCN now operational, a pipeline of other clients and transactions is expected to follow. The platform’s decentralized technology has significantly expedited the settlement process while enhancing its security and efficiency.
Tyrone Lobban, Head of Onyx Digital Assets at JPMorgan, expressed that the TCN platform unlocks capital and allows it to be utilized as collateral, ultimately increasing efficiency at scale. The TCN platform empowers the creation, transfer, and settlement of tokenized traditional assets while enabling rapid movement of collateral – a substantial improvement over previous methods.
Furthermore, the TCN platform provides clients with access to intraday liquidity through secure repo transactions using tokenized collateral, reducing reliance on costly unsecured credit lines. External clients participating in blockchain trades also benefit from having their own node to settle transactions and access essential reports, ensuring transparency and control in their financial operations.
