Quick take:
- JPMorgan’s digital assets and blockchain platform is processing up to $2 billion daily.
- Tyrone Lobban, head of Onyx said clients using the service are mainly interested in tokenisation.
- Onyx has already tokenised US treasury bonds, mortgage-backed securities and cash using the JPM coin.
When JPMorgan launched its digital assets and blockchain platform in 2020, there weren’t many mainstream financial services companies making similar moves. However, 3 years later, Onyx seems to have made significant progress given the figures floated by the product head at JPMorgan Tyrone Lobban, on Tuesday.
Speaking on a panel about increasing institutional involvement in the sector at the CCData Digital Asset Summit on 3 October in London, Lobban said the Onyx Digital Assets and Blockchain platform is processing between $1 billion and $2 billion per day, Marketsmedia reported.
In reference, the world’s largest crypto exchange company registered just over $2.8 billion in transaction volume over the past 24 hours. However, it is worth noting that JPMorgan’s focus is on institutional clients.
According to Lobban, 99.9% of its clients use its platform for tokenisation purposes, with the likes of Goldman Sachs and BNP Paribas among the early adopters. The platform has already tokenised a variety of assets including US treasury bonds, mortgage-backed securities and cash using the JPM coin.
One of the reasons clients are choosing Onyx is the ability to access intraday liquidity using tokenised collateral, helping to overcome the challenges of drawing a credit line overnight, which can be affected by a change in interest rates.
“For example, a client may want to borrow $1bn for three hours and we can use smart contracts to automate delivery versus payment at the right times using precise terms,” said Lobban. “There is no middle or back office processing.”
According to Lobban, nearly every financial institution has made plans to tokenise traditional financial assets.
The world’s leading online payments platform PayPal recently launched the PayPal USD stablecoin PYUSD, which analysts believe could be used for tokenisation, thus helping the payments giant to lower transaction costs.
Recently, Citigroup launched a product similar to Onyx, after launching a private token service for institutional clients. The product allows Citi and its institutional clients to turn customer deposits into digital tokens.
“If you look at the scale of traditional securities versus crypto, that is where the opportunity lies,” Lobban added, referencing the way banks and financial services companies are embracing tokenisation of financial assets.
Onyx has now processed over $900 billion and Lobban believes that intra-day repos using tokenised collateral could save the money market business about $20 million a year. “It is not massive in the grand scheme of things, but it’s not immaterial either,” he added. “We can build out further use cases and expand into other asset types.”
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