Goldman Sachs Conducts First Repo Trade On JPMorgan’s Private Blockchain.
2021-06-23 | Big Bob
Goldman Sachs has conducted its primary repo trade employing JPMorgan’s private blockchain network.
In line with an official report by
Bloomberg earlier on Tuesday, the initial trade was conducted by Goldman on 17
th June and came
within the sort of a tokenized version of a United States
Treasury bond swapped for JPMCoin. The transaction took three hours and five minutes
to finish.
JPMCoin
is among the investment bank’s stablecoin pegged in the ratio of 1:1 to the USD.
“We see this as a pivotal moment for the digitization of transactional activity,” added Mathew McDermott, global head of digital assets for Goldman’s global markets division, according to the report.
Repurchase agreements, or repos
for brief, are
a kind of loan where financial institutions sell collateralized securities within a contract solely
to purchase them back at an inflated price at another date, usually overnight.
It's particularly beneficial to banks
as it permits them to borrow on
a cheap budget.
McDermott outlined that the blockchain
development was
an enormous boon to the repo market, presently
valued at over $4.6 trillion globally, given how repos function with collateral and cash being interchanged simultaneously and instantaneously.
“We pay interest per the minute,” added McDermott. “We firmly think this may change the character of the intraday marketplace.”
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