BlackRock shares go digital on JPMorgan’s Onyx blockchain

BlackRock, the world’s largest asset manager, has tokenized its money market fund shared, which were later provided as collateral to Barclays in an over-the-counter derivatives deal, JPMorgan Chase & Co. announced on Wednesday. 

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Fast Facts

• BlackRock executed the transaction on JPMorgan’s Ethereum-based Onyx blockchain and Tokenized Collateral network (TCN).

• Through Onyx, the collateral was transferred “almost instantaneously.” Traditional settlement solutions would take around the day for the transaction, Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, told Bloomberg.

• Lobban added asset tokenization increases capital efficiency by freeing up locked funds that can be used as collateral in new transactions.

• JPMorgan plans to eventually let client institutions use other assets as collateral, including equities and fixed income, Ed Bond, the head of trading services at JPMorgan told Bloomberg.

• JPMorgan has been exploring the tokenization of traditional financial assets since 2015 when it launched its blockchain program with the release of Quoruom, its permissioned fork of the Ethereum network.

• The third largest banking institution in the U.S., Citigroup launched Citi Token Services in September, a blockchain-based cross-border payment solution for institutions, which uses tokenized deposits and smart contracts for real-time settlements.

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