Capital markets News

JP Morgan using blockchain network to automate money market fund payments

JP Morgan

Last week fund management network Calastone announced that JP Morgan Asset Management would use Calastone’s blockchain-based solution for automated money market fund settlement. Calastone, with more than 1,900 clients in the fund management sector, migrated its entire infrastructure onto blockchain a year ago. It positions its platform as a Distributed Market Infrastructure (DMI) and essentially provides integration for the fund sector.

Now all parties share the same view of transactions, whether an administrator, asset manager, broker / intermediary or retail investor. Before the migration to distributed ledger technology (DLT), communications between parties always involved messaging using SWIFT and other formats.  

In 2018 Calastone launched its money market services. It automates the connection of corporate or bank treasury management systems that have cash to invest, linking them to money market funds. Any money market fund connected to the Calastone network automatically has a connection to any investors on the network.

Calastone already enables trade automation for JP Morgan funds globally. Now the asset manager will use new features, including automated payments, the first to sign up for the new service.

“Morgan Money has been designed to deliver a best in class customer experience, centred on seamless integration and operational efficiency,” sais Paul Przybylski, Head of Product Strategy and Development at J.P. Morgan Asset Management. “With that in mind, we are excited to partner with Calastone to bring automated settlements to the platform, allowing our users to settle trades in real time, with automated trade workflow, initiated from one Morgan Money platform.”

As of last year, the Calastone platform was based on Enterprise Ethereum, but with a desire to remain blockchain agnostic. The company is a member of Hyperledger and an investor in Digital Asset.

Calastone is not the only solution to leverage blockchain for fund management. Others include IZNES in France, Luxembourg based FundsDLT and more recently, FNZ landed a deal for the South African fund sector.