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JPMorgan Adds Fidelity International to its Tokenized Network

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The network is housed on JPMorgan’s own blockchain network, Onyx Digital Assets, which is built on Ethereum.

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The companies said on Monday that Fidelity International had joined JPMorgan’s Tokenized Collateral Network (TCN).

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The overseas business, which is entirely independent of the US company, tokenized shares of its money market fund through TCN in yet another example of conventional financial institutions in action. The network is housed on JPMorgan’s Ethereum-based private blockchain network, Onyx Digital Assets.

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In times of market stress, “the ability to post MMF shares as collateral directly without first redeeming to cash offers the prospect of greater efficiency and stability,” a press statement stated.

“Tokenization of money market shares is where TCN began, and we plan to expand across equities, fixed income, and a variety of asset classes,” the statement went on. “There could be new opportunities in the collateral market if assets can be tokenized and used under pledge and title transfer structures outside of market operating hours.”

On TCN, the first tokenized transaction occurred in October of the previous year. The network was developed by JPMorgan’s trading services in collaboration with its Onyx Digital Assets.

According to Keerthi Moudgal, head of product at Onyx Digital Assets, “Fidelity’s participation in TCN brings its MMF units onto our network through tokenization, adding a new asset that is otherwise prohibitively complex to use across today’s collateral landscape.”

“We’re thrilled to support Fidelity on this next phase of its journey as it joins the TCN, and we’re excited about the potential benefits from ODA’s continued growth,” she said.

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This is not Fidelity International’s first foray into the world of digital assets. The company offers an exchange-traded bitcoin product that may be found on exchanges throughout Europe. Although the product is also known by the name ticket FBTC (much like the US fund), it is unrelated to the US-based company of the same name.

As we expand our usage of this technology, tokenizing our money market fund shares for use as collateral is a crucial and logical first step. According to Stephen Whyman, head of debt capital markets at Fidelity International, “the benefits to our clients and the larger financial system are clear; in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk.”

Other conventional financial institutions operating in the US have focused on money market funds onchain.

BlackRock and Franklin Templeton both have money; just last week, Franklin announced that they could now fund their investments by converting USDC to USD. In April of last year, the fund was first unveiled.

BlackRock, the largest asset manager in the world, made its first attempt at creating a tokenized fund with BUIDL, which it unveiled earlier this year in collaboration with Securitize. CRYPTOCASTER® - DECENTRALIZED FREEDOM!


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