JPMorgan celebrates its first blockchain repo transaction through JPM Coin

JPMorgan celebrates its first blockchain repo transaction through JPM Coin

The financial giant JPMorgan pushes the boundaries of Blockchain adaptation among large financial companies.


10 Dec 2020 , 19:32 @ Katie Müller

JPMorgan celebrates its first blockchain repo transaction through JPM Coin

The financial giant JPMorgan pushes the boundaries of Blockchain adaptation among large financial companies.

JPMorgan, a global leader in financial services, announced today that it has executed a blockchain-based repo transaction, using its JPM Coin. For the first transaction, JPMorgan waited approx. two months from the moment when introduced a new Blockchain division called Onyx.

The repo market provides a widely used form of secured financing, however, current operational limitations prevent the meaningful use of such financing to meet intraday liquidity needs,

JPMorgan

Using blockchain enables borrowers and lenders to execute shorter-term, intraday repo transactions with real-time, simultaneous transaction settlement, creating new ways to access intraday liquidity.

JPMorgan

JPMorgan plans to make its product available to other counter-parties soon, to which Goldman Sachs has responded:

This is an exciting project which vividly highlights where enterprise blockchain can address a real-world problem in the financial system and we look forward to going live in early 2021,

Mathew McDermott, Global Head of Digital Assets at Goldman Sach

What exactly is the repo market?

  • A repurchase agreement (repo) is a short-term secured loan: one party sells securities to another and agrees to repurchase those securities later at a higher price. The securities serve as collateral. The difference between the securities’ initial price and their repurchase price is the interest paid on the loan, known as the repo rate.

Read also: One of the largest financial institutions in the world launches Europe-wide crypto initiative

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