JPMorgan, a prominent U.S. banking giant, recently introduced its blockchain-based tokenization application called the Tokenized Collateral Network (TCN), as reported by Bloomberg on October 11.
The Tokenized Collateral Network enables the conversion of traditional assets into digital assets. It also makes way for faster and more secure on-chain settlements.
Notably, TCN completed its first trade for asset management giant BlackRock. The Tokenized Collateral Network is an application that enables investors to utilize their assets as collateral.
Furthermore, By leveraging blockchain technology, investors can seamlessly transfer ownership of collateral without physically moving the underlying holdings. Ledgers store them. In a groundbreaking occurrence, JPMorgan and BlackRock engaged in their first public collateralized trade.
Moreover, the Trade Confirmation Number (TCN) transformed shares of a money market fund into digital tokens. The two companies transferred these tokens to Barclays Bank as security for their over-the-counter derivatives exchange.
JPMorgan’s TCN: Blockchain Transformation
In May 2022, JPMorgan conducted the first internal test of the TCN. Now that TCN is live, there are several other clients and transactions in the pipeline. The main objective of launching TCN was to enhance and expand the process of traditional settlements using blockchain technology.
By leveraging decentralized technology, this innovative approach has resulted in a faster, more secure, and highly efficient process. According to Tyrone Lobban, who serves as the head of Onyx Digital Assets at JPMorgan, the new TCN platform can unlock capital and use it as collateral in ongoing transactions.
This feature enhances efficiency on a larger scale. Additionally, this platform facilitates the creation, transfer, and settling of tokenized traditional assets. Notably, unlike previous methods, it enables almost instant movement of collateral.
The blockchain platform enables clients to easily access intraday liquidity by utilizing secure repo transactions with tokenized collateral. This eliminates the need for costly unsecured credit lines.
External clients who agree to participate in the blockchain trade have their own dedicated nodes to facilitate seamless settlement and gain access to other reports. The U.S. banking giant has come a long way from criticizing the decentralized world in its early days.
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He is currently actively involved in testing and launching various blockchain and crypto-centered services amid growing demand. The bank used a blockchain-based solution to settle trades with Indian banks in June.