Financial holding JPMorgan Chase has completed an intraday repo on its upcoming blockchain application. The transaction was made using the stablecoin JPM Coin developed by the bank, said in a press release.
The transaction was conducted between the holding’s broker-dealer and the bank. The blockchain app used in the transaction created by Onyx supports the instant settlement and repurchase maturities in hours. Blockchain has been used for both collateralized securities and cash settlements.
The repo market allows financial firms to trade large volumes of securities and borrow at low interest, while liquidity providers can make small profits.
REPO transactions are similar to a short-term loan: one of the participants sells an asset to another at a fixed price and undertakes an obligation to repurchase the same asset or part of it at a different price in the future.
“By deploying blockchain, we created new opportunities to streamline operational processes and accelerate settlement for repo. Our new solution will help unlock trapped pockets of liquidity for intraday use and allow for reduced risk profiles for our clients and J.P. Morgan,” said Scott Lucas, head of DLT markets at JPMorgan.
In early 2021, it is planned to launch a blockchain application for commercial use. Banks Goldman Sachs and BNY Mellon participated in test trades on the platform and intend to continue using it.
Recall that in October, JPMorgan created the Onyx blockchain division and announced the transition of DLT technology to commercialization. Then the representatives of the holding announced the planned rebranding of the Interbank Information Network (IIN) payment system based on the blockchain with JPM Coin as its basis.