JPMorgan, one of the leading banking institutions in the United States and the world, introduced its “Tokenized Collateral Network” system, realized in collaboration with BlackRock and Barclays. The Tokenized Collateral Network (TCN) has emerged as a pioneering blockchain-based application that offers JPMorgan’s clients the opportunity to use tokenized assets as collateral.
Shares Transformed into Digital Tokens
According to Bloomberg’s report, BlackRock converted shares from one of its money market funds into digital tokens and transferred these tokens to Barclays for use as collateral in OTC (over-the-counter derivative) trading. This transaction took place on JPMorgan’s Onyx Digital Assets platform.
It was known that in May 2022, JPMorgan internally tested the tokenized shares from BlackRock’s money market fund on its private blockchain platform, Onyx Digital Assets. Ed Bond, the Head of Trading Services at JPMorgan, indicated that with TCN’s official launch, the bank is prepared for a multitude of clients and transactions.
More Asset Types to Be Used in the Near Future!
With this digital transformation, the transfer between Blackrock and Barclays was completed in just a few minutes. Thanks to tokenization, shares from money market funds were used as collateral between derivative counterparts. While TCN currently focuses on money market funds, it is expected to add support for other asset types like stocks and fixed income in the near future.
Furthermore, JPMorgan has also launched a blockchain-based payment system called JPM Coin. This system offers clients the ability to make faster payments, unhindered by standard banking hours. It has been noted that JPM Coin recently began providing support for euro transactions as well.