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Singapore’s DBS Bank announced it had executed its first intraday repo transaction using JP Morgan’s Onyx Digital Assets network powered by blockchain.
Banks use repurchase agreements, aka repos for short term funding by selling securities such as U.S. Treasuries, and agreeing to repurchase them later.
Repos are a massive market with more than $4 Trillion in U.S. dollar repos outstanding at any one time.
Since repos are intended for short term funding, the drawback is that settlement usually takes two days.
Distributed ledger technology (DLT), with its instant settlement or delivery versus payment (DvP), makes it practical to have repo transactions that span a few hours rather than a day or more.
Andrew Ng, Head of Treasury and Markets at DBS, said that for repos, “infrastructural and technical inefficiencies meant the minimum term has usually been one day.
In the case of Onyx Digital Assets, in addition to tokenizing the repo security, the DLT repo solution also uses JPM Coin its blockchain-based bank account, to enable instant settlement.
DBS Bank is the first Asian bank to use the repo solution. Other announced participants include Goldman Sachs and BNP Paribus.
When BNP joined in May, cumulative transactions had reached $300 billion since the December 2020 launch.
This is the first time that J.P. Morgan is acting as both Triparty Agent and Collateral Token Agent, which is an exciting development for the market,” said Ed Bond, Head of Trading Services, Asia Pacific at J.P. Morgan.
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Banks use repurchase agreements, aka repos for short term funding by selling securities such as U.S. Treasuries, and agreeing to repurchase them later.
Repos are a massive market with more than $4 Trillion in U.S. dollar repos outstanding at any one time.
Since repos are intended for short term funding, the drawback is that settlement usually takes two days.
Distributed ledger technology (DLT), with its instant settlement or delivery versus payment (DvP), makes it practical to have repo transactions that span a few hours rather than a day or more.
Andrew Ng, Head of Treasury and Markets at DBS, said that for repos, “infrastructural and technical inefficiencies meant the minimum term has usually been one day.
In the case of Onyx Digital Assets, in addition to tokenizing the repo security, the DLT repo solution also uses JPM Coin its blockchain-based bank account, to enable instant settlement.
DBS Bank is the first Asian bank to use the repo solution. Other announced participants include Goldman Sachs and BNP Paribus.
When BNP joined in May, cumulative transactions had reached $300 billion since the December 2020 launch.
This is the first time that J.P. Morgan is acting as both Triparty Agent and Collateral Token Agent, which is an exciting development for the market,” said Ed Bond, Head of Trading Services, Asia Pacific at J.P. Morgan.
#transactions6 #goldmansachs9 #intelligence #goldmansachs8 #inefficiencies0 #transactions5 #goldmansachs7 #inefficiencies9 #jpmorganchase4 #inefficiencies8 #infrastructural4 #transactions4 #inefficiencies7 #infrastructural3 #goldmansachs6 #goldmansachs5 #inefficiencies6 #intelligence5 #inefficiencies5 #goldmansachs4 #inefficiencies4 #transactions3 #goldmansachs #inefficiencies3 #goldmansachs3 #infrastructural6 #intelligence4 #infrastructural9 #transactions2 #infrastructural8 #infrastructural2 #transactions1 #inefficiencies2 #goldmansachs2 #jpmorganchase3 #intelligence6 #transactions #intelligence3 #distributed #jpmorganchase2 #intelligence2 #deliveryversuspayment #transactions0 #goldmansachs1 #infrastructural #inefficiencies #goldmansachs0 #jpmorganchase9 #infrastructural1 #infrastructural0 #inefficiencies1 #securities #treasuries #jpmorganchase8 #intelligence1 #jpmorganchase1 #jpmorganchase7 #infrastructural5 #jpmorganchase6 #jpmorganchase5 #jpmorganchase #infrastructural7 #jpmorganchase0 #transactions9 #transactions8 #transactions7 #intelligence0 Read more
1 comment
Fabian P. L.
Nov 30, 2022 - 8:35AM
Thank you for sharing. Very interesting
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