OCBC has announced that it is the first bank in Singapore to offer intraday institutional lending using blockchain technology.
This approach aims to maximize returns on excess liquidity through reverse repurchase transactions (reverse repos) conducted in JPMorgan’s digital financing application, powered by the Onyx Digital Assets platform.
OCBC is the first external trading partner to have this reverse repository capability on its platform.
This system allows OCBC to take tokenized securities as collateral and lend cash to JP Morgan during the day.
By leveraging blockchain technology, the exchange of cash and securities occurs almost instantly, a significant improvement over traditional repo markets, where the process can take at least one business day.
OCBC reportedly completed its first reverse repo transaction on October 11, 2024, with a maturity of less than 120 minutes.
Additionally, OCBC is utilizing this platform to borrow cash through intraday repos, demonstrating the bank’s ability to effectively manage its liquidity needs through this new method.
Both the reverse repurchase transaction and the repurchase transaction were completed on October 11, 2024.
These two trades were denominated in US dollars, but the platform also supports trades denominated in euros.
Since its launch in 2020, JPMorgan’s digital financing application has facilitated more than 1,200 intraday repo transactions totaling more than USD 1.5 trillion.
JPMorgan expects increased adoption of intraday lending and borrowing as interest in this technology for optimizing liquidity increases.
Kenneth Lai, Head of Global Markets at OCBC, said:
“By partnering with JP Morgan Digital Financing for Intraday Repos, OCBC provides a powerful tool for intraday cash lending and borrowing leveraging blockchain technology, which will restore liquidity management. Increased power and ability to take advantage of excess intraday liquidity.
I expect the market to become more competitive and sophisticated. Therefore, the ability to optimize liquidity and maximize returns on an intraday basis can be a game-changer. We are excited to participate and explore other opportunities to collaborate with JPMorgan on joint digital challenges. ”
Scott Lucas, Head of Market Distributed Ledger Technology at JPMorgan, said:
“We are pleased to work with OCBC to demonstrate the ability and interest of lenders to participate in the intraday liquidity market.
We look forward to further growth in this type of trading. ”
