JPMorgan has completed a live, blockchain-based intraday repo transaction using an in-house developed application which supported instantaneous settlement and maturity of the transaction in hours, as opposed to days.
The offering will now be made available in production to external counterparties in the US – some of which have already simulated transactions on the new application.
JPMorgan recently unveiled Onyx, a new business unit to scale and commercialize blockchain innovation, with JPM Coin as a key offering from the suite of products, platform, and services.
The intraday repo application is deployed on the platform developed and supported by Onyx and uses JPM Coin for the cash leg.
The transaction, which was successfully conducted between JPMorgan’s broker dealer and banking entity, provides a means to overcome traditional operational limitations to securing access to intraday liquidity in the repo market.
Christine Moy, who led the work from the Onyx team, says: “JPMorgan’s intraday repo application demonstrates how leveraging foundational technology built by Onyx enables new capabilities like the digital representation of securities ownership, supports unique functionality like atomic trade settlement, accelerates time-to-market, and eases effort required to get to production.”
JPMorgan first developed the solution and tested its viability by conducting trades between two of its affiliates, alongside successful simulations of trades with Goldman Sachs and other entities, with BNY Mellon as the triparty agent.
Mathew McDermott, global head of digital assets at Goldman Sachs, comments: “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.”