JPMorgan Chase & Co., an American multinational investment bank, has reported it had completed a live, blockchain-based intraday repo transaction.
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According to an official press release, the transaction was conducted between JPMorgan’s broker dealer and banking entity, through an in-house blockchain. With the help of blockchain, the time of the transaction reduced from days to hours.
Blockchain allowed borrowers and lenders to conduct shorter, intraday repo transactions with real-time transaction settlement. Collateral and cash legs of the repo transaction were settled with the help of the blockchain tech and the bank's stablecoin called JPM Coin, the bank added.
Scott Lucas, Head of Markets DLT at JPMorgan, says nowadays repo market has some "technical inefficiencies" and the bank decided to use the distributed ledger technology to reduce clients’ intraday risk profile.
"By deploying blockchain, we created new opportunities to streamline operational processes and accelerate settlement for repo," Lucas added.
The financial institution points out the offering will also be available to external counterparties in the US. Meanwhile, the adoption of bitcoin (EXANTE: Bitcoin) by institutional investors has begun, JPMorgan's analysts say. According to the US financial banking giant, gold might suffer in the long-term if bitcoin continues to evolve on the traditional financial market.
However, bitcoin's adoption has only begun, while for gold "its adoption by institutional investors is very advanced," the experts emphasize.
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