JPMorgan announced it has conducted its first live collateral settlements using its in-house blockchain network with clients BlackRock and Barclays.
The transactions involved BlackRock tokenizing fund shares on JPMorgan’s Ethereum-based Onyx blockchain, then transferring them to Barclays to collateralize a derivatives trade.
Streamlining Settlement With Blockchain
According to JPMorgan’s Tyrone Lobban, moving collateral via Onyx allowed near instant settlement compared to a process that normally takes a full day.
At scale, blockchain would boost capital efficiency by freeing up collateral to enable ongoing transactions.
While still early, the successful client tests validate blockchain’s potential to transform inefficient Wall Street plumbing.
Expanding Real-World Blockchain Use
However, JPMorgan’s Onyx network use remains minimal compared to its overall business.
Despite interest, few Wall Street firms have taken steps to implement blockchain operationally so far.
But the collaboration with BlackRock and Barclays marks a milestone in pragmatic blockchain adoption by major finance players.
Active Blockchain Development
JPMorgan has been proactive around blockchain, also filing trademarks for a “JP Morgan Wallet” to support crypto services.
But it remains cautious on crypto assets directly, only recently allowing access to crypto funds for private wealth clients.
By advancing enterprise blockchain tools like Onyx, JPMorgan aims to unlock the technology’s benefits without exposing itself to crypto’s risks.
The collateral settlements with BlackRock and Barclays demonstrate JPMorgan’s eagerness to realize blockchain’s potential value, even if broader Wall Street remains hesitant.
