JP Morgan’s Tokenized Collateral Platform Sees First Live Settlement Through BlackRock and Barclays

BlackRock and Barclays have gone live on JP Morgan’s Tokenized Collateral Network (TCN) with the platform facilitating a collateral settlement for an OTC derivative transaction for the first time. TCN was first revealed in May 2022 following a landmark transaction using tokenized Money Market Fund (MMF) shares as collateral, meeting an industry-wide desire for mobilization without the transfer of the underlying asset.  The platform is a private blockchain application which sits between a collateral receiver and a provider allowing the tokenized representation of the collateral assets to be transferred using blockchain technology. Just over a year after it was revealed, the first transaction has now occurred with BlackRock tokenizing the representation of shares in a Money Market Fund through TCN and transferring to Barclays to cover collateral requirements. JP Morgan noted that the underlying documentation was amended to support the delivery of MMF shares as collateral. Tokenization was said to have occurred within a matter of minutes through connectivity between the fund’s transfer agent and TCN. The transfer between BlackRock and Barclays was near instantaneous and represents a first for BlackRock, JP Morgan and Barclays, where the shares in MMFs are used as collateral between bilateral derivatives counterparts.