Today JP Morgan announced that its Onyx blockchain unit has developed a repo transaction platform. The key differentiator is targeting intraday repo transactions, which blockchain can enable with instantaneous settlement using JPM Coin.
However, Broadridge, which processes repo transactions for 19 of the 24 primary dealers in the U.S., first piloted its DLT Repo platform in 2017. More on that later.
A typical repo transaction happens when banks require short term cash. So they borrow cash by selling securities, often treasuries, and agree to repurchase them at a slightly higher price in the near future. Clearly, the repurchase could also be executed using smart contracts. The average outstanding amount of repos in the U.S. was $2.5 trillion in 2019 according to SIFMA.
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