JPMorgan Conducted Test Intraday Repo Using JPM Coin on Upcoming Blockchain App

The financial holding JPMorgan Chase conducted an intraday repo trade on a blockchain application slated for launch. The calculations used the bank’s developing stablecoin JPM Coin, according to a press release.

Participants in the deal included a broker-dealer and a bank that are part of the holding company. The Onyx division’s blockchain application supports instant settlements and repo maturities measured in hours. The blockchain was used for both secured securities and cash settlements.

The repo market allows financial firms to trade large volumes of securities and borrow cheaply, while liquidity providers earn small profits.

Repo deals resemble short-term lending: one party sells an asset to another at an agreed price and undertakes to buy back the same asset or part of it at a different price in the future.

“By implementing blockchain, we are opening new possibilities to optimise operating processes and accelerate repo settlements. The new solution will unlock liquidity for intraday use while settling transactions in real time. In doing so, we will reduce the risk profiles for our clients and JPMorgan,” said Scott Lucas, head of JPMorgan’s DLT Markets desk.

A commercial rollout of the blockchain application is planned for early 2021. Banks Goldman Sachs and BNY Mellon participated in test trades on the platform and intend to continue using it.

In October, JPMorgan created the blockchain subsidiary Onyx and announced the move to commercialise its DLT technology. At the time, the group said it planned to rebrand the Interbank Information Network (IIN) payments system on a blockchain basis with JPM Coin at its core.

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