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JPMorgan launches tokenization platform TCN, featuring BlackRock as a prominent client: Report
American banking powerhouse JP Morgan launched its proprietary blockchain collateralization platform known as Tokenized Collateral Network (TCN) on October 11, as reported by Bloomberg. TCN successfully executed its inaugural trade for asset management leader BlackRock.
Tokenized Collateral Network is a tool that enables investors to leverage assets as collateral. By employing blockchain technology, it facilitates the transfer of collateral ownership without the need to move assets in the underlying ledgers.
The TCN network’s first public collateralized transaction involved JP Morgan and BlackRock, converting shares of a money market fund into digital tokens, which were subsequently transferred to Barclays Plc as collateral for an over-the-counter derivatives exchange between the two firms.
The initial internal trial of TCN was carried out by JPMorgan in May 2022, and now that TCN is operational, there is a pipeline of additional clients and transactions. JP Morgan’s tokenization network was established to enhance and scale the process of settling traditional transactions on a blockchain. The implementation of decentralized technology has rendered the process quicker, more secure, and more efficient.
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Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, stated that the new TCN platform releases capital that has been previously immobilized, enabling its use as collateral in ongoing transactions, which would enhance efficiency at scale. The platform facilitates the creation, transfer, and settlement of tokenized traditional assets. This tokenization platform allows for the near-instant movement of collateral, in contrast to earlier methods.
The blockchain platform provides clients with access to intraday liquidity through a secured repo transaction utilizing tokenized collateral, rather than relying on costly unsecured credit lines. External clients who consent to the blockchain trade operate their own node, which they can use to settle the trade and access additional reports.
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The American banking institution has significantly evolved from its initial skepticism towards the decentralized sector and is now actively engaged in testing and launching various blockchain and crypto-focused services in response to increasing demand. Earlier this year, the bank utilized a blockchain-based solution to settle trades with Indian banks in June.
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