J.P. Morgan in collaboration with National Bank of Canada said Friday they have tested a new blockchain platform for issuing financial instruments. They issued a USD 150M, one-year floating-rate Yankee certificate of deposit, with a parallel simulation of the issuance using blockchain technology.
The blockchain test involved the parties mirroring the execution of the actual transaction through a debt issuance application developed by J.P. Morgan that runs on Quorum, an open-sourced variant of the Ethereum blockchain, specifically designed to meet the needs of financial markets participants, the companies said in a prepared statement.
The blockchain debt issuance application is designed to incorporate functions across the entire debt instrument transaction lifecycle, including origination, distribution, execution, settlement, interest rate payments, and maturity repayments.
This aim of this collaboration between leading market participants is an important milestone in progressing blockchain technology toward real financial markets applications.
“One of the mandates of the J.P. Morgan blockchain program is to identify how blockchain technology can create value, efficiency, and a better experience for our clients across the financial markets value chain,” said Christine Moy, Blockchain Program Lead, J.P. Morgan
Goldman Sachs Asset Management, Pfizer, and Western Asset, a Legg Mason company, were among the investors in the Yankee certificate of deposit.