Firm tests blockchain debt issuance
J.P. Morgan has tested a new blockchain platform for issuing financial instruments with the National Bank of Canada and other large firms. The firm is seeking to streamline origination, settlement, interest rate payments and other processes.
The Canadian bank issued a $150m one-year floating-rate Yankee certificate of deposit, with a parallel simulation of the issuance, using blockchain technology. The blockchain test involved the parties mirroring the execution of the actual transaction through a debt issuance application developed by J.P. Morgan that runs on Quorum®, an open-sourced variant of the Ethereum blockchain, specifically designed to meet the needs of financial markets participants.
The blockchain debt issuance application is designed to incorporate functions across the entire debt instrument transaction lifecycle, including origination, distribution, execution, settlement, interest rate payments and maturity repayments.
“One of the mandates of the J.P. Morgan blockchain program is to identify how blockchain technology can create value, efficiency, and a better experience for our clients across the financial markets value chain,” said Christine Moy, Blockchain Program Lead, J.P. Morgan. “This is an exciting example of how J.P. Morgan leveraged our combined capabilities in capital markets and blockchain technology, delivering results to a diverse set of clients.”
This distinctive collaboration is an important milestone in progressing blockchain technology toward real financial markets applications.
Read the full article on Reuters.