BNP Paribas relies on JP Morgan technology
Europe’s largest bank, BNP Paribasunveils its use of blockchain technology from the Onyx division of JP Morgan.
This solution solves a very specific problem. Since the subprime crisis in 2008, banks have had to own a portion of highly liquid assets in their balance sheet, so that they can quickly accumulate cash in the event of problems. This is the case, for example, with bonds, such as US government treasury bills.
This is where Onyx’s solution comes in, which allows you to tokenize these assets in order to collateralize them for a few hours to raise liquidity. Everything is framed by smart contracts, which guarantee that the borrower has the necessary capital and that he will repay his debt on time. This financial maneuver makes it possible, at the same time, to keep said obligations in the balance sheet.
Thanks to JP Morgan’s blockchain services, BNP Paribas now has an additional tool, which allows it to optimize the value of its capitallike what we can do with our cryptocurrencies on the Aave protocol (AAVE).
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A pioneer in the use of blockchain in banking
While the JP Morgan CEO knows how to be critical of cryptocurrencies, his company’s stance on the underlying technology is quite different. Also known for the issuance of its stablecoin pegged to the dollarthe JPM Coin, Onyx division deployed its blockchain in December 2020.
The latter already counts more than 300 billion dollars of transactions. One of JP Morgan’s executives, Scott Lucas, announces that the bank will in the future enrich its network use cases for the collateralization system used by BNP Paribas:
“We are considering expanding the eligibility criteria set in addition to US Treasuries. »
If we can still qualify this initiative as an experiment, we see here that the banking sector is fully aware of the opportunities offered by the blockchain.
👉 On the same subject – JP Morgan becomes the first bank to join the metaverse Decentraland (MANA)
Source: Financial Times
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