bonds work too.
Fidelity International also has a long history with digital assets and worked on a tokenization project with Swiss bank Sygnum back in 2019.
In October last year, JPMorgan carried out its first live blockchain-based collateral settlement transaction involving tokenized shares in a BlackRock money-market fund. The shares were transferred to Barclays for collateral in an over-the-counter derivatives trade. BlackRock has gone on to further embrace tokenization through its public-facing BUIDL project, with tokenization services firm Securitize.
“Tokenizing our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology,” Stephen Whyman, Fidelity International\'s head of debt capital markets, said in an email interview. “The benefits to our clients and the wider financial system are clear; in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk.”
JPMorgan’s TCN started with the tokenization of money market shares, a type of mutual fund that invests in high-quality, short-term debt instruments and cash equivalents. The plan is to expand across equities, fixed income and a range of asset classes, the bank said.
“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,” said Keerthi Moudgal, head of product at Onyx Digital Assets, JP Morgan, via email.