- JPMorgan’s Tokenized Collateral Network (TCN) finalizes its inaugural transaction with BlackRock and Barclays.
- The blockchain-based platform offers swifter collateral transactions and eyes expanding its collateral assets support.
Drawing insights from an article from The Block, JPMorgan‘s blockchain-integrated Tokenized Collateral Network (TCN) has marked its operational debut by processing a transaction for eminent clients BlackRock and Barclays. In this innovative transaction, BlackRock transformed shares from one of its money market funds into digital tokens. These tokens were subsequently passed on to Barclays, acting as collateral for an over-the-counter derivatives exchange between the two financial titans.
The Rise of Tokenized Collateral Transactions
JPMorgan took its first step with TCN back in May 2022, trialing its potential by transferring tokenized representations of shares from a BlackRock money market fund on its proprietary blockchain platform, Onyx Digital Assets. Fast forward to today, and with TCN actively running, there’s a growing queue of interested clients and transactions, as shared by Ed Bond, JPMorgan’s head of trading services.
The significant advantage? TCN can transfer collateral at an unparalleled speed, trimming down the conventional day-long duration to mere moments, as highlighted by Tyrone Lobban, the head of Onyx Digital Assets at JPMorgan. When brought into broader execution, this tool could magnify efficiency by swiftly freeing capital, making it readily available for collateral in subsequent trades.
Expanding Horizons: Beyond Money Market Funds
Starting with a focus on money market funds, TCN is reportedly broadening its gaze to embrace other assets for collateral, which encompasses equities and fixed income. Think of asset tokenization as bypassing the need to exchange your paper currency for coins to use a vending machine. Instead, tokens can be utilized directly, speeding up the entire process.
Adding to its blockchain endeavors, JPMorgan has introduced the JPM Coin, a blockchain-fueled payment method. Not only does JPM Coin operate beyond the traditional banking hours, but it also ensures swift transactions. The coin, initially offering U.S. dollar support, has recently incorporated support for euro transactions as well.