J.P. Morgan, HQLA-X, and Ownera Introduce Short-Term Collateralized Loan System
In a groundbreaking development for the financial industry, J.P. Morgan, HQLAx, and Ownera have collaborated to launch a blockchain-based platform for real-time, intraday exchange of cash and high-quality liquid collateral in repurchase agreements (repos) across separate digital ledgers.
This innovative solution, orchestrating the full transaction lifecycle—execution, clearing, and delivery-versus-payment (DvP)—enables settlement precision down to the minute. It achieves this by handling cash transfers via J.P. Morgan’s Kinexys network and collateral transfers on HQLAx’s platform, while Ownera’s technology manages routing and interoperability through the open FinP2P protocol.
The platform optimises intraday liquidity for repo participants in several ways. It enables instant peer-to-peer swaps of cash and securities, reducing settlement times from days to minutes. By reducing operational friction and counterparty risks through distributed ledger technology and automated back-office processes, it also minimises operational burdens.
Furthermore, the solution supports both bilateral and tri-party repo formats and enhances scalability and interoperability. It is designed to integrate with multiple trading venues, various collateral providers, and digital cash types such as tokenized deposits, stablecoins, and future central bank digital currencies (CBDCs).
Participants can exchange securities ownership on HQLAx while simultaneously settling cash digitally on Kinexys, providing synchronized delivery-versus-payment finality multiple times during the trading day. By connecting these distinct ledger systems via Ownera's cross-platform routing, the platform addresses a long-standing industry need for interoperability between digital cash and collateral systems.
The solution facilitates the exchange of ownership of securities on the HQLA-X platform for cash settled on J.P. Morgan Digital Financing application via blockchain deposit accounts on J.P. Morgan's Kinexys. The full potential of the solution lies in its scalability as digital solutions gain traction across institutional financial markets.
Ami Ben-David, CEO and Founder of Ownera, has expressed excitement about the scalability and potential expansion of the solution across the broader market. The solution is designed to operate at an industry-wide level, reducing market fragmentation by supporting potential future extension to multiple trading venues, collateral sources, and digital cash instruments.
The first phase of the solution is live, with executed transactions reaching up to $1bn in trading volume per given day, with expected future volume growth. Richard Glen, Solutions Architect Lead at HQLA-X, states that the solution transforms how clients manage intraday liquidity by offering precision, speed, certainty, and control.
Dan Phillips, Executive Director of Markets Digital Assets at J.P. Morgan, expresses anticipation for supporting clients' intraday Repo needs in collaboration with HQLA-X and Ownera. Richard Glen further remarks that this solution is a crucial step towards a truly interconnected and highly efficient global Repo market.
Ownera's market-leading routing technology allows for the full lifecycle orchestration of Repo transactions, including execution and DvP exchange of collateral and cash. Repo traders can now exchange cash at J.P. Morgan and collateral at HQLA-X intraday, with settlement and maturity times specified to the minute.
In conclusion, the cross-ledger repo solution launched by J.P. Morgan, HQLAx, and Ownera promises to revolutionise the financial industry by offering a seamless, efficient, and scalable platform for intraday settlement of cash and collateral in repurchase agreements.
The cross-ledger repo solution, facilitated by J.P. Morgan, HQLAx, and Ownera, leverages digital technology to optimize liquidity for repo participants by enabling instant peer-to-peer swaps of cash and securities, and minimizing settlement times from days to minutes.
This groundbreaking platform supports various trading venues, different collateral providers, and diverse digital cash types, including tokenized deposits, stablecoins, and future central bank digital currencies (CBDCs), thereby enhancing scalability and interoperability.
