OCBC 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 agreements (reverse repos) conducted on J.P. Morgan’s Digital Financing application, powered by the Onyx Digital Assets platform.
OCBC is the first external counterparty with this reverse repo capability on the platform. This system allows OCBC to lend cash to J.P. Morgan intraday, receiving tokenized securities as collateral. The transaction had a maturity of less than 120 minutes.
Furthermore, OCBC has also utilized the platform to borrow cash via an intraday repo, demonstrating the bank’s ability to effectively manage its liquidity needs through this new method. The two transactions were denominated in US dollars, although the platform also supports euro-denominated transactions.
Since its launch in 2020, J.P. Morgan’s Digital Financing application has facilitated over 1,200 intraday repo transactions exceeding $1.5 trillion in value.
Kenneth Lai, head of Global Markets at OCBC, said in a statement: “Collaborating with J.P. Morgan’s Digital Financing for intraday repo provides OCBC with a powerful tool for intraday borrowing and lending of cash by harnessing blockchain technology. This improves our liquidity management resilience and allows us to put excess intraday liquidity to work.
“I envision that markets will only get more competitive and sophisticated, so the ability to optimize liquidity on an intraday basis to maximize returns can be a game changer. We are excited to participate in and to explore other opportunities to collaborate with J.P. Morgan on our joint digital agendas.”
Scott Lucas, head of Markets Distributed Ledger Technology at J.P. Morgan, said in a statement: “We are pleased to collaborate with OCBC in demonstrating the ability and interest for lenders to participate in an intraday liquidity market. We are looking forward to further growth in this type of transaction.”