Fidelity International goes live on J.P. Morgan’s Tokenized Collateral Network
12 June 2024 US
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Investment management services firm Fidelity International has gone live on J.P. Morgan’s Tokenized Collateral Network (TCN).
TCN sits on J.P. Morgan’s Onyx Digital Assets, and operates as a private blockchain-based platform, which is used for tokenised asset movements including collateral settlement.
Fidelity International has tokenised the representation of shares in Fidelity International money market funds (MMF) through the TCN.
The ability to post MMF shares as collateral directly without first redeeming to cash, offers the prospect of greater efficiency and stability in times of market stress, the firms say.
TCN has started with the tokenisation of money market shares, with a view to expanding across equities, fixed income and a range of asset classes.
According to J.P. Morgan, the ability to tokenise assets and use them under both title transfer and pledge structures, outside of any limiting market operating hours, has the potential to create new opportunities in the collateral market.
Commenting on the news Stephen Whyman, head of Debt Capital Markets at Fidelity International, says: “Tokenising our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology.
“The benefits to our clients and the wider financial system are clear — in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk.”
Harpreet Bains, managing director and head of trading services digital at J.P. Morgan, adds: “Growing the number of participants on TCN was a key objective from the outset, and we’re delighted to welcome Fidelity International to the network.
“We believe TCN has the potential to transform collateral markets, allowing our clients to extract greater utility from existing asset pools, and broadening the network is the next important step on that journey.”
TCN sits on J.P. Morgan’s Onyx Digital Assets, and operates as a private blockchain-based platform, which is used for tokenised asset movements including collateral settlement.
Fidelity International has tokenised the representation of shares in Fidelity International money market funds (MMF) through the TCN.
The ability to post MMF shares as collateral directly without first redeeming to cash, offers the prospect of greater efficiency and stability in times of market stress, the firms say.
TCN has started with the tokenisation of money market shares, with a view to expanding across equities, fixed income and a range of asset classes.
According to J.P. Morgan, the ability to tokenise assets and use them under both title transfer and pledge structures, outside of any limiting market operating hours, has the potential to create new opportunities in the collateral market.
Commenting on the news Stephen Whyman, head of Debt Capital Markets at Fidelity International, says: “Tokenising our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology.
“The benefits to our clients and the wider financial system are clear — in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk.”
Harpreet Bains, managing director and head of trading services digital at J.P. Morgan, adds: “Growing the number of participants on TCN was a key objective from the outset, and we’re delighted to welcome Fidelity International to the network.
“We believe TCN has the potential to transform collateral markets, allowing our clients to extract greater utility from existing asset pools, and broadening the network is the next important step on that journey.”
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