The National Bank of Canada and J.P. Morgan issued a $150 mln, a one-year certificate of deposit using blockchain technology Friday. The collaboration is an essential step towards progressing blockchain technology into financial market applications, say experts.
"Blockchain-related technologies have the potential to bring about major change in the financial services industry,” said David Furlong, Senior Vice-President for Artificial Intelligence, Venture Capital, and Blockchain at National Bank of Canada.
The test mirrors the execution of an actual transaction through blockchain application developed by J.P. Morgan called Quorum, which runs on the Ethereum.
Quorum encompasses the entire lifecycle of a transaction including origination, distribution, execution, settlement, interest rate payments, and maturity repayments.
Goldman Sachs Asset Management (GSAM), Pfizer, and Western Asset were among the investors in the certificate of deposit.
David Fishman, head of GSAM's Liquidity Solutions business said:
"We're excited to have the opportunity to learn from this test and to help develop more efficient ways of trading – from providing more transparency to streamlining processes and minimizing transaction costs."
J.P. Morgan, who was the sole dealer on the debt issuance has more than $24 tln of assets under custody and $423 bln in deposits.