Article Image

IPFS News Link • Central Banks/Banking

J.P. Morgan Completed A "Landmark Transaction" Using Tokenized BlackRock Shares as Collate

•, Eddie Donmez

The U.S. biggest bank, completed a "landmark transaction...using tokenized ownership interests in BlackRock's Money Market Fund shares as collateral" within a matter of minutes.

These were then transferred to Barclays for collateral in an OTC trade.

This sets the stage for more traditional assets being tokenized and used as collateral via their new Tokenized Collateral Network (TCN).

What is tokenization?

Digital asset tokenization is the process whereby ownership rights of an asset are represented as digital tokens and stored on a blockchain - nothing to do with bitcoin etc.

According to JPM this has the potential to:

• Drastically reduce settlement fails

• Provide near-instantaneous real-time change of ownership

• And release assets trapped at recordkeeping agents to help participants maximize utilization across their assets.

The tokenization of financial and real-world assets is forecasted to be a $16 trillion business opportunity by 2030 according to Boston Consulting Group (BCG).