BlackRock, the world’s largest asset manager, has tokenized its money market fund shares on JPMorgan’s Ethereum-based Onyx blockchain, enabling almost instantaneous collateral transfers. JPMorgan aims to expand the use of asset tokenization for various financial instruments.
BlackRock, the global asset management giant, has made a significant move by tokenizing its money market fund shares. These tokenized assets were utilized as collateral in an over-the-counter derivatives deal with Barclays, as announced by JPMorgan Chase & Co. The entire transaction was executed on JPMorgan’s Ethereum-based Onyx blockchain, coupled with the Tokenized Collateral network (TCN).
The use of blockchain technology via Onyx enabled the swift transfer of collateral, a process that would traditionally take a full day. Tyrone Lobban, the head of Onyx Digital Assets at JPMorgan, emphasized the enhanced capital efficiency achieved through asset tokenization. This approach liberates locked funds, making them available for use as collateral in new transactions.
Furthermore, JPMorgan has future plans to extend this concept to allow client institutions to use a variety of assets as collateral, including equities and fixed income. This move aligns with JPMorgan’s longstanding interest in the tokenization of traditional financial assets, dating back to the launch of its blockchain program in 2015 with the introduction of Quoruom, a permissioned Ethereum network fork.
In a parallel development, Citigroup, the third-largest U.S. bank, introduced Citi Token Services in September. This blockchain-based cross-border payment solution leverages tokenized deposits and smart contracts for real-time settlements.