According to a report from Bloomberg, BlackRock, the world’s largest asset manager, has reached a new milestone in its crypto strategy. The company has been working on ways to integrate with blockchain technology and has partnered with other financial institutions.
BlackRock Advances in the Crypto Space
As per the report, BlackRock conducted a transaction on the derivatives market using JP Morgan’s blockchain platform, Onyx. The transaction involved the use of tokenized collateral, which are digital versions of shares from one of BlackRock’s funds.
BlackRock used these tokens to settle a transaction with Barcles in an over-the-counter (OTC) trade. OTC trades occur between two parties, with details about price, order size, and other specifics remaining hidden from the public.
Tom McGrath, Deputy Chief Operating Officer of the Cash Management Group at BlackRock, stated:
Money market funds play a crucial role in providing liquidity to investors during times of high market volatility. Tokenizing money market fund shares as collateral in clearing and margining transactions would significantly reduce the operational obstacles in meeting margin calls when market segments face acute margin pressures.
The report suggests that this transaction is a significant contribution to the trading volume of Onyx. Although the blockchain platform still has a “tiny” trading volume compared to JP Morgan’s legacy platform, it shows promising progress.
Furthermore, the transaction was settled instantaneously between the parties involved. A spokesperson for JP Morgan stated that this operation could open up new possibilities for legacy financial institutions by allowing them to free up capital and increase efficiency across different markets.
Ed Bond, Head of Trading Services at JP Morgan, commented:
Institutions on the network can leverage a broader range of assets to fulfill their collateral requirements following trading activities.
Crypto: A Dollar Alternative?
Bloomberg claims that the traditional financial sector has been searching for ways to integrate blockchain technology for over a decade. The technology has the potential to reduce costs, accelerate transactions, and enhance trading volume.
In particular, BlackRock has emerged as a prominent player in the crypto space. The asset manager holds a stake in leading publicly traded Bitcoin miners in the US while advocating for the approval of the country’s first spot Bitcoin exchange-traded fund (ETF) and exploring opportunities to strengthen its position in the emerging sector.
This initiative extends to top executives at BlackRock. CEO Larry Fink has referred to Bitcoin as an “international asset class” with the potential to become an alternative to the US dollar.
As of now, Bitcoin (BTC) is trading at $27,050, recording a 2% loss in the last 24 hours.
BTC’s price is moving sideways on the daily chart. Source: BTCUSDT on Tradingview
Cover image from Unsplash, chart from Tradingview