Major U.S. bank JPMorgan has launched the Tokenized Collateral Network (TCN), a blockchain-based tokenization app, with its first transaction being an asset trade with investment giant BlackRock.
JPMorgan Chase & Co. has successfully tested its blockchain platform called the Tokenized Collateral Network (TCN). The application allows investors to tokenize assets and use them as collateral. The bank’s first client under the initiative was BlackRock. This is reported by Bloomberg.
As part of the first public transaction between JPMorgan and BlackRock, the TCN converted shares of one money market fund into digital tokens, which were then transferred to Barclays as security for an over-the-counter derivatives transaction between the two companies.
According to Tyrone Lobban, Head of Onyx Digital Assets at JPMorgan, the new platform allows capital to be used as collateral in transactions, making them more efficient. The TCN enables tokenized traditional assets to be created, transferred, and held, and collateral to be moved almost instantly.
The bank has been developing and internally testing the DLT platform since May 2022. Ed Bond, Head of Trading Services at JPMorgan, said the TCN is fully ready to serve customers. Eventually, with the blockchain solution, the bank will soon be able to allow clients to use other assets, including equities and fixed income, as collateral.
JPMorgan claims that the main purpose of launching the TCN is the need to scale and optimize the traditional collateral settlement process. The use of blockchain technology at the core of the new solution made the process faster, safer, and more efficient.
JPMorgan is actively involved in testing and launching various blockchain solutions both to optimize internal processes and to meet clients’ demand for crypto-centric services.
