NAGA : JPMorgan Has Started Using Blockchain for Collateral Settlements

JPMorgan (#JPM.N) predicts significant growth in the use of blockchain in the banking sector. The company has already assessed the prospects of such a solution. For example, the global investment bank has been using a blockchain for collateral settlements, allowing its clients to use a wider range of assets as collateral and trade outside market operating hours. The first transaction of this nature took place on May 20.

What does that mean?

According to Tyrone Lobban, head of JPMorgan's Blockchain Launch and Onyx Digital Assets, the investment bank could be among the first to create a full-fledged bridge between institutional investors and institutional investors' next-generation DeFi. That's why the company is actively exploring blockchain technology and the meta-universe.

In some areas, JPMorgan has indeed managed to make a breakthrough. For example, in addition to derivatives trading, repo trading, and securities lending, JPMorgan said that it plans to expand tokenized collaterals to include equities, fixed income, and other asset types. ✅

"There will be a growing set of financial activities that happen on the public blockchain, so we want to make sure that we cannot only support that but also be ready to provide related services.", - said Tyrone Lobban.

While skeptical of Bitcoin and other crypto, JPMorgan CEO Jamie Dimon is bullish about blockchain. He said in April: "Decentralized finance and blockchain are real, new technologies that can be deployed in both public and private fashion, permission or not." ☝️

How will this affect the financial market?

The use of blockchain for collateral settlement in the banking sector is certainly a positive signal for investors and crypto-enthusiasts. Blockchain-based collateral settlement can benefit from derivatives, repo trading, and securities lending.

In addition, the bank intends to expand tokenized collateral to cover equities, fixed income, and other asset classes in the coming months. So we should expect to see more interest in securities of financial companies like JPMorgan that invest in blockchain. In addition, the crypto market will also feel meaningful support from this.

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