In the financial world, evolution is not just an option – it’s a necessity. JPMorgan, the American banking giant, introduced its latest innovation in blockchain technology: the Tokenized Collateral Network (TCN). This innovative application will revolutionize the way we treat traditional assets.
JPMorgan, one of the leading banks in the United States, recently revealed details about its platform based on blockchain technology, called the Tokenized Collateral Network (TCN). With this application, it is possible to transform traditional assets into digital assets, paving the way for faster and more secure settlements on the blockchain system.
TCN allows investors to use assets as collateral. The key to this innovation is blockchain technology, which enables the transfer of ownership of collateral without the need to move assets in the main ledgers.
One of the first public actions carried out using TCN was the conversion of shares of one money fund into digital tokens. These tokens were then transferred to Barclays bank as collateral for a derivative transaction between JPMorgan and BlackRock.
The first internal tests of TCN were conducted by JPMorgan in May 2022. Now that the system is active, more clients and transactions are expected to join. The main goal of launching TCN was to streamline and scale the process of traditional settlements in the blockchain system. Using decentralized technology made the process faster, safer, and more efficient.
According to Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, the new TCN platform frees up capital and allows it to be used as collateral in ongoing transactions. This platform allows for the creation, transfer, and settlement of tokenized traditional assets. Moreover, it enables almost instantaneous movement of collateral, unlike earlier methods.
JPMorgan offers its clients access to intraday liquidity through a secured repo transaction using tokenized collateral. All external clients who have agreed to transact on the blockchain system have their own node where they can settle the transaction and access other reports.
Over the past few years, JPMorgan has come a long way, initially criticizing the decentralized world, and now actively participating in testing and implementing various services related to blockchain and cryptocurrencies in response to growing market demand. In June, the bank used a solution based on blockchain technology to settle transactions with Indian banks.
Photo: JPMorgan
