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Monday, June 10, 2024
HomeCryptoFidelity International Tokenizes JPMorgan's Money Market Fund on the Blockchain

Fidelity International Tokenizes JPMorgan’s Money Market Fund on the Blockchain

Fidelity International, a London-based fund manager, has tokenized shares in its money market fund (MMF) using JPMorgan’s Ethereum-based private blockchain network, Onyx Digital Assets.

Fidelity International said that the tokenization process occurs almost instantly through the connection between the fund’s transfer agent (JPMorgan’s transfer agency company) and the Tokenized Collateral Network (Tokenized Collateral). Network – TCN), an intermediary application between collateral takers and collateral providers on the bank’s Onyx blockchain, an independent entity from the US-based Fidelity Management and Research company.

Tokenization of traditional financial assets has become a top priority for banks, and it’s an area that JPMorgan has been researching for the past few years. The essence of tokenization is to create virtual investment vehicles on the blockchain, representing real-world assets such as real estate, precious metals, collectibles, stocks and bonds.

Fidelity International also has long-standing exposure to digital assets and worked on a tokenization project with Swiss bank Sygnum in 2019.

In October last year, JPMorgan conducted the first blockchain-based direct collateral settlement transaction, involving tokenized shares in a BlackRock money market fund. The shares were transferred to Barclays as collateral in an OTC derivatives transaction. BlackRock has continued to further develop tokenization technology through its public BUIDL project, with tokenization services company Securitize.

“Tokenizing money market fund shares for use as collateral is an important first step in opening up money market fund shares for use as collateral,” Stephen Whyman, head of debt capital markets at Fidelity International, said in an interview. scale up the application of this technology. The benefits for customers and the financial system as a whole are clear; in particular improving efficiency in delivering margin requirements and reducing transaction costs and operational risks.”

JPMorgan’s TCN started with the tokenization of money market equities, a type of mutual fund that invests in high-quality assets, short-term debt instruments and cash equivalents. The plan will expand to equities, fixed income and a range of other asset classes, the bank said.

Keerthi Moudgal, head of product at Onyx Digital Assets, JP Morgan, revealed: “Fidelity’s participation in TCN brings its MMF units into the network via tokens, adding an extremely complex new asset class. complex for use in today’s mortgage sector.”

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Viet Cuong

According to CoinDesk

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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