Investment Banking

Goldman Sachs Tests Tokenized Treasury Bonds

The investment bank swapped swapped a tokenized version of a U.S. Treasury bond for JPM Coin — JPMorgan Chase’s stablecoin.
Vincent RyanJune 23, 2021

Goldman Sachs Group has made its first trade on JPMorgan Chase’s private blockchain network.

A report from Bloomberg revealed that the repo trade was conducted on June 17, and the transaction was completed after three hours and five minutes. However, the value of the transaction remains unknown.

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Goldman Sachs successfully swapped a tokenized version of a U.S. Treasury bond for JPM Coin — JPMorgan’s stablecoin, which is pegged 1:1 to the value of the U.S. dollar.

“We see this as a pivotal moment for the digitization of transactional activity,” said Mathew McDermott, global head of digital assets for Goldman’s global markets division.

Using blockchain in the repo markets means that unlike in the traditional repo market, the exact timing of each transaction can now be logged.

“We pay interest per the minute. We firmly think this will change the nature of the intraday marketplace,” McDermott said.

Smart contracts on the blockchain enable the cash and collateral to interchange simultaneously, and McDermott noted that this is a big step up for the repo market, which is valued at $4.6 trillion.

[JPM Coin is not available to retail investors and not traded on a cryptocurrency exchange. “JPM Coin runs in conjunction with the 400-bank Liink payment network and powers things like securities settlement (in repo trades) across JPMorgan’s client base,” according to Coindesk.]

This story originally appeared on Benzinga. © 2021

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