Posted 4 months ago | by @devadmin
JPMorgan has announced that the bank performed a blockchain-based re-purchase agreement or repo market transaction, using its JPMCoin.
The bank said they used the blockchain to settle an “atomic trade settlement.” It’s worth noting that the transaction on the JPMCoin stablecoin platform can take hours, instead of days like traditional finance, according to JPMorgan.
A repo market is where big banks go to borrow money from other large financial institutions to cover their operating costs usually paid back within a few days. The repo market is known for its inefficiencies.
“The repo market provides a widely used form of secured financing, however, current operational limitations prevent the meaningful use of such financing to meet intraday liquidity needs,” JPMorgan stated in a press release. “Using blockchain enables borrowers and lenders to execute shorter-term, intraday repo transactions with real-time, simultaneous transaction settlement, creating new ways to access intraday liquidity.”
JPMorgan further intends to make its product available to other banks and institutions in the future. It’s not just JPMorgan, rival bank Goldman Sachs has also conducted successful trade simulations with BNY Mellon serving as a triparty agent.
“This is an exciting project which vividly highlights where enterprise blockchain can address a real-world problem in the financial system and we look forward to going live in early 2021,” said Mathew McDermott, Global Head of Digital Assets at Goldman Sachs.
In 2016, more than 100 executives from some of the world’s largest financial institutions including Nasdaq, Citigroup Inc., Visa Inc., Fidelity, Fiserv Inc., Pfizer Inc. and others, gathered for a private meeting at the Times Square office at the Nasdaq. It was during this meeting that the executives tested digital cash and settlements. Four years later, about on track with the amount of time it takes to observe new innovations and develop technology, we are seeing many of these major companies jumping into blockchain and cryptocurrency. It’s unknown if JPMorgan was at that secret meeting but it’s widely assumed a representative for the company was there.
Speaking of VISA, the payment company recently partnered with an Ethereum-based stablecoin project USDC to integrate the digital asset for payment for its more than 60 million-plus merchants as Bitboy Crypto reported. Similarly Mastercard its competitor has also discussed Central Bank Digital Currencies, with its CEO Ajay Banga; stating that he was bullish on CBDC technology.
More recently eight central banks prepared a report on CBDCs including — Canada, the U.K., Japan, Sweden, Switzerland, the U.S. Federal Reserve, the European Central Bank, and lastly the Bank for International Settlements (BIS). In other words, unless you live under a rock cryptocurrencies are abundantly becoming more mainstream.
Bitcoin is currently trading at [FIAT: $18,064.49] UP +0.6% in the last 24 hours according to Coingecko at the time of this report.