Goldman Sachs signed on to JPMorgan’s custom blockchain service

  • It is revealed that JPMorgan is using blockchain services that can tackle real-world problems in the financial world
  • The report instantly took the attention of Goldman Sachs
  • Goldman Sachs has signed on the blockchain services of JPMorgan

JPMorgan, one of the prestigious firms providing financial services, is using blockchain to drive efficiency in the repo market. Recently Goldman Sachs, the American multinational investment bank and financial service provider firm, seems to utilize the JPM token for repo trades. Goldman has taken the early mover advantage, where several brokers and dealers are looking to grab the advantage of JPM tokens for their repo operations.

JPMorgan’s first live trade is conducted internally

Scott Lucas, the head of blockchain markets at JPMorgan, has revealed that the bank is already using blockchain to conduct millions of dollars worth of repurchase agreements. The bank uses its own JPM token, which is a stablecoin, pegged with the United States dollar. Using the JPM token, the bank efficiently swaps digitized United States Treasury bonds. JPM token is on the bank’s Onyx blockchain infrastructure, and it is also found that the bank has conducted its initial live trades internally utilizing its Onyx blockchain infrastructure.

The blockchain report attracted the bank’s rivals

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After the reveal of JPMorgan’s blockchain, the financial district rival Goldman and other firms have provided their attention. Next year soon, Goldman will sign on to Onyx for repo trades. According to Lucas, the bank is at the point of offering their services, as other banks and financial dealers are expected to join the services. According to Christine Moy, who runs the Onyx infrastructure, the blockchain-enabled the repo market to be measured in minutes and hours and not on an overnight and days basis.

Onyx blockchain can address a real financial world problem

According to Matthew McDermott, who leads Goldman’s virtual asset unit, the enterprise blockchain can tackle a real-world financial system problem. As repo agreements are short term agreements, dealers sell government bonds to investors and purchase them back the next day at higher prices. That difference between the buy and sell price reflects the interest rate. However, the market is considered plumbing the financial system, as it offers cash and securities flow. 

Back in September 2019, the entire repo market got out of control, as the rates surged to four times Federal Reserve’s benchmark rate. However, this market performed well, which raised several doubts regarding the liquidity shortages and harmful practices in the financial markets.

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Ahtesham Anis
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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