Goldman Sachs has conducted its primary repo trade employing JPMorgan’s private blockchain network.
In line with an official report by Bloomberg earlier on Tuesday, the initial trade was conducted by Goldman on 17th June and came within the sort of a tokenized version of a United States Treasury bond swapped for JPMCoin. The transaction took three hours and five minutes to finish.
JPMCoin is among the investment bank’s stablecoin pegged in the ratio of 1:1 to the USD.
“We see this as a pivotal moment for the digitization of transactional activity,” added Mathew McDermott, global head of digital assets for Goldman’s global markets division, according to the report.
Repurchase agreements, or repos for brief, are a kind of loan where financial institutions sell collateralized securities within a contract solely to purchase them back at an inflated price at another date, usually overnight. It’s particularly beneficial to banks as it permits them to borrow on a cheap budget.
McDermott outlined that the blockchain development was an enormous boon to the repo market, presently valued at over $4.6 trillion globally, given how repos function with collateral and cash being interchanged simultaneously and instantaneously.
“We pay interest per the minute,” added McDermott. “We firmly think this may change the character of the intraday marketplace.”