JPMorgan is testing blockchain for loan settlements – Bits Media

Large investment bank JPMorgan Chase & Co launched a pilot project using blockchain to calculate collateral for loans and borrowings.

According to Bloomberg, several test transactions have already been carried out. The first one passed 20 May. As part of testing the developers conducted a transaction with the transfer of tokenized shares of the BlackRock fund as collateral.

After putting into commercial operation, the new system will allow investors to use a wider list of assets to secure loans.

"That, what we have achieved is the instant transfer of collateral assets without any delays. BlackRock has been actively involved in the project from day one and is exploring opportunities to use this technology.", – said the head of trading services at JPMorgan Ben Challis (Ben Challice).

A blockchain-based collateral settlement system could be useful, eg, when trading derivatives and repo, as well as securities lending. According to Challis, in the coming months the bank plans to expand support for tokenized collateral, by including shares, bonds and other types of assets.

Note, that JPMorgan has been using blockchain for repo trading with Goldman Sachs and BNP Paribas since the end 2020 of the year. Currently, the volume of transactions has exceeded $300 billion.

At the end of March, the founder of the startup Custodia Bank (Earlier Avanti Financial) Caitlin Long (Caitlin Long) stated, that Goldman Sachs' indecisiveness allowed JPMorgan to outperform its rival in the cryptocurrency market.