TL;DR
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Some of JPMorgan’s systems are changing – but the end result is largely the same with the JPMorgan’s Tokenized Collateral Network (TCN), which has big ‘McDonald’s Speedee Service System’ vibes.
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Financial firms are still posting stocks/shares as collateral. But the process of doing so is now far more efficient, leading to a drastic reduction in cost and time.
Full Story
Before Rich and Maurice McDonald, there was no such thing as ‘fast’ food.
The genius of the McDonald brothers was how they designed their ‘Speedee Service System,’ which made the preparation of each burger faster and cheaper.
…sure, the food itself was largely unchanged by the system. But the process of creating it became far more efficient.
Something similar is happening over at JPMorgan, in that some of its systems are changing – but the end result is largely the same.
The change comes in JPMorgan’s Tokenized Collateral Network (TCN), which has big ‘McDonald’s Speedee Service System’ vibes.
Here’s the basic gist of it:
When taking out loans, you need to post collateral (which is rich person talk for ‘put down a deposit’).
And in the world of traditional finance, big firms will often use stocks or shares as collateral, instead of cash.
…only problem is, the systems supporting the transfer of stocks/shares aren’t exactly efficient.
What JPMorgan’s Tokenized Collateral Network lets these financial firms do is:
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Lock their stocks/shares up.
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Get blockchain based tokens in return (where 1 token = 1 share).
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Post these ‘tokenized’ shares as collateral, using blockchain technology (which is WAY faster and WAY cheaper than the old system).
So, much like a McDonald’s burger before/after the ‘Speedee Service System’ was implemented: the end result is the same, but the process is improved.
Financial firms are still posting stocks/shares as collateral.
But the process of doing so is now far more efficient, leading to a drastic reduction in cost and time.
Pretty neat how blockchain is seeping into even the stodgiest parts of the traditional financial world, no?
