By Isabelle Castro Margaroli
For some time, we have been hearing about tokenization’s “trillion-dollar opportunity”.
JP Morgan has taken a step in showing HOW and WHY it should happen. Today, the finance giant executed the first tokenized derivatives trade on their brand spanking new Tokenized Collateral Network (TCN).
“What is the TCN?” I hear you ask. It’s an application JP Morgan has been working on for some time, which sits on their Ethereum-based Onyx Blockchain. It enables investors to utilize assets as collateral and transfer collateral ownership without moving assets in underlying ledgers.
The first stop is money market funds. This is a big deal for these banks – The transfer occurred between BlackRock and Barclays Tokenization within a matter of minutes.
Tom McGrath, deputy global COO of the cash management group at BlackRock, said, “The tokenization of money market fund shares as collateral in clearing and margining transactions would dramatically reduce the operational friction in meeting margin calls when segments of the market face acute margin pressures.”
The TCN is now officially live, with JP Morgan leading the tokenization charge.
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JPMorgan moves to commercialise blockchain with Tokenized Collateral Network
JPMorgan Chase has transformed money market fund shares into tokens to execute an over-the-counter derivatives trade between BlackRock and Barclays Bank using blockchain technology.
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