Multinational investment bank JPMorgan Chase & Co is reportedly conducting the testing phase for utilizing its self-developed private blockchain for collateral settlements.

Specifically, per Bloomberg, JPMorgan has reportedly carried out a trial transaction on May 20th, which included two of its entities transferring a tokenized representation of Black Rock Inc. money market fund shares. 

A money market fund reportedly operates as a kind of mutual fund which is viewed as a low risk investment, since it provides exposure to a wide range of liquid and short term assets, nominally cash, cash equivalents and debt-securities with high credit ratings.

Regarding JPMorgan’s wider plan for its private blockchain, the bank reportedly revealed that its intention of making it possible for investors to put forward a vast array of assets to use as collateral, which will also have usage beyond the limit of regular market hours. It pointed to equities and fixed income in particular.

“What we’ve achieved is the friction-less transfer of collateral assets on an instantaneous basis. BlackRock wasn’t a counterparty but it has been heavily involved in the initiative “since day one and are exploring use of this technology.” JPMorgan’s global head of trading services Ben Challice additionally remarked. 

JPMorgan has reportedly been taking an active stance regarding its association with crypto and blockchain tech for a while, having also established the Onyx Digital Assets (ODA) two years ago. 

The initiative is reportedly referred to as a “blockchain-based network that enables the processing, recording and Delivery-versus-Payment (DVP) exchange of digital assets across asset classes.”

Regardless of the exact outline of whether JPMorgan utilized the ODA in this occurence, the network has sufficient preparation for the exchange of cash for different types of tokenized collateral, offering intraday liquidity, as well as providing a gateway to tap into the bank’s digital payment infrastructure and token JPM Coin.