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JPMorgan Completes Live Intraday Repo Transaction using Blockchain

December 15, 2020

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Investment bank JPMorgan says it has completed a live intraday repo transaction using a blockchain solution that will soon see a commercial launch.

  • The repo trade was carried out between JPMorgan’s broker-dealer and banking entity, the bank announced Thursday.
  • The blockchain application used was developed in-house by the bank’s blockchain business arm, Onyx, and is said to support the settlement and maturity of such transactions in hours rather than days.
  • The trade also used the bank’s stablecoin jpm coins for the cash leg. Blockchain was used for both collateral and cash legs.
  • For context, the repo market allows financial firms such as JPMorgan to trade large quantities of securities and to borrow cheaply – allowing parties with cash to earn a small return.
  • Repo trades are like a short-term loan, involving a trader selling an asset to another trader at a set price and committing to repurchase the same asset, or part of the asset, at a different price at a future date.
  • The blockchain app will see production use, being offered to external counterparties in the U.S., according to the announcement.
  • Goldman Sachs and BNY Mellon have both been involved in trial trades on the platform and will be involved going forward.
  • Mathew McDermott, global head of digital assets at Goldman Sachs, said his institution is “looking forward to going live in early 2021.”
  • Brian Ruane, CEO of BNY Mellon Clearance & Collateral Management, said his bank would be a “critical partner for JPMorgan to provide much-needed collateral services to market participants looking to execute intraday repo transactions.”

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