The French banking giant, BNP Paribas will now trade digital tokens on JPMorgan’s blockchain Onyx.
Onyx is a blockchain network for short-term asset loans and now the second-largest banking group in Europe, BNP Paribas, will start trading on it.
According to a Financial Times report, the Onyx Digital Assets blockchain system, which was introduced in December, has processed over $300 billion in government bond transactions to date.
Currently, Onyx deals specifically with the intraday repurchase (repo) market, which is a total worth of $12 trillion.
Banks can lend tokenized US Treasury Bonds for some days without the assets exiting their balance sheets. This assists to navigate liquidity demands applied on institutions on account of the 2008 financial crisis.
Borrowers are enabled to then exchange the tokens for liquid cash, increasing their available collateral for use within derivatives markets. Onyx is incorporated with JPMorgan’s own digital payments token, the JPM Coin. It debuted approximately at the same time as its blockchain platform.
The head of engineering at BNP Paribas, Joe Bonnaud, said that the bank’s adoption of Onyx was more than just an exploration of a proof of concept.
The bank, which had $612 billion in assets at the start of 2022, hopes that the move would facilitate the usage of blockchain as market trading and operations life cycles evolve. Rival bank Goldman Sachs also joined JP Morgan’s Onyx during last June.
BNP Paribas is in the group of French banks which are exploring the permissioned blockchain projects of the French central bank, trading debt securities as a part of research on the central bank digital currencies (CBDCs).
In a survey conducted by the BIS it was seen that 90% of central banks showed their interest in CBDC. This shows that banks are keen to join the new wave and they are trying to make sure they offer more services to maximize profit as well as customer convenience.
