A blockchain-based collateral settlement system is being tested by JPMorgan Chase.

    JPMorgan Chase has announced it will trial a blockchain system to move assets on its balance sheet, the first use of distributed ledger technology in a systemically important financial firm, according to the Financial Times. JPMorgan Group Global Head of Blockchain Umar Farooq outlined the bank’s plans to use its own version of the technology to move cash holdings between subsidiaries of the bank, the paper reported.

    Using blockchain technology, JPMorgan’s proof-of-concept can decrease the number of steps required to settle some collateral transactions from ten to two. JPMorgan has been working with the Ethereum platform.

    Carol Realini, the head of JPMorgan’s Blockchain Center of Excellence, commented on the development: Our goal is to enhance client experience, make their processes more efficient and augment their operations with enterprise-grade technology. The technologies are very promising. They’re very applicable and we really want to take advantage of what we think are very powerful use cases.

    JPMorgan Chase has been trialling a blockchain platform called Quorum to reduce the time it takes to process a financial transaction. The bank is hoping to replace paper-heavy post-trade processes with digital ledgers, which would be more efficient and faster.

    JPMorgan Chase is currently one of the largest bank in the United States and Quorum is an enterprise-ready distributed ledger and smart contract platform.
    It’s a blockchain platform that was developed by JPMorgan Chase and Ethereum developers, EthLab.

    The project, called Interbank Information Network (IIN), outlines a system that would allow banks to exchange cash and collateral account information “in real-time and with standardized data” through the blockchain, according to a JPMorgan Chase & Co. statement.

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