Last week we reported that State Street had become a third party custodian on JP Morgan’s Kinexys blockchain platform. The transaction involved a $100 million commercial paper issuance by Singapore’s OCBC Bank. This week OCBC revealed that this is part of a new $1 billion digital US commercial paper (USCP) program. It is in addition to the bank’s longstanding conventional $25 billion USCP initiative.
For the entire digital program the bank plans to use JP Morgan’s Digital Debt Service application, with JP Morgan acting as sole dealer. In the past the use of DLT could have resulted in a reduced credit scoring for the debt. But using the Kinexys permissioned infrastructure, the instruments received the highest short term ratings, P-1 by Moody’s, and F1+ by Fitch.
Issuance, settlement, record-keeping and servicing will be done on-chain. One of the key benefits is it allows OCBC to raise money quickly. With the recent $100 million issuance, it received the money in minutes.
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