JPMorgan, Baton Develop Blockchain Tech For Real-Time Automatic Derivative Margin Payments
Giant investment banking institution JPMorgan has partnered with Blockchain-based firm Baton Systems to come up with a blockchain-based solution that will help in digitizing derivative margin payments, Cointelegraph reports.
According to the firm, the new blockchain-based platform is poised to allow instantaneous payments to different clearing agencies. The announcement also indicated that the platform will allow payment of cash as well as the transfer of collateral.
At the moment the system being used by the investment bank mandates the collateral custodians to initiate various systems and reports leading to delays and inconveniences. The new platform will be linked to JPMorgan automation system thereby enacting automatic collateral processing and enhancing the speed of transfer.
Antony Fraser, the global head of clearing operations in JPMorgan explained that the new platform will help in the reduction of collateral processing time from hours to instant. He stressed that the platform is currently enhancing fast, increased efficiency in payments and payments for all the sides involved within the collateral lifecycle.
On his part, Arjun Jayaram, Baton’s CEO, praised the platform stating that it gets rid of manual interventions required while processing collateral. He added that the new system links the bank’s existing collateral as well as cash systems.
The announcement is silent on whether the new platform is developed on top of JPMorgan’s owned Quorum blockchain network. However, it stated that in future the plan is to enhance scaling among various clearinghouses in the world as well as including fresh functionalities that will comprise of challenging clearing arrangements.
The use of blockchain technology in the management of collateral has been gaining momentum within the financial sector in the recent past. In June this year, Nasdaq announced it had successfully tested a blockchain-based platform that will offer a 24/7 securities collateral services. The new Nasdaq solution is primed to allow parties involved to manage margin calls, return process as well as the securities collateral delivery in a few minutes compared to hours.
JPMorgan has been investing heavily in Blockchain and just this week, the bank revealed it had entered into an agreement with Singapore’s financial regulator for its Ubin project which aims at connecting the country’s CBDC with various private offered coins like JPM Coin.