National Bank of Canada (NBC) announced on Friday, with the support of J.P. Morgan, it issued a $150 million one-year floating-rate Yankee certificate of deposit, with a parallel simulation of the issuance using blockchain technology. According to the banking group, this blockchain test involved the parties following the execution of the actual transaction through a debt issuance application developed by J.P. Morgan that runs on Quorum, an open-sourced variant of the Ethereum blockchain, specifically designed to meet the needs of financial markets participants.
“The blockchain debt issuance application is designed to incorporate functions across the entire debt instrument transaction lifecycle, including origination, distribution, execution, settlement, interest rate payments, and maturity repayments. This unique collaboration between leading market participants is an important milestone in progressing blockchain technology toward real financial markets applications.”
While sharing more details about the test, David Furlong, Senior Vice-President of Artificial Intelligence, Venture Capital and Blockchain at NBC, stated:
“Blockchain-related technologies have the potential to bring about major change in the financial services industry. National Bank of Canada is proud to join forces with trusted partner J.P. Morgan to test blockchain technology in the context of a Yankee certificate of deposit issuance. This is a unique opportunity for us to expand our knowledge of blockchain. National Bank of Canada will continue to innovate over the coming years and remain on the lookout for ways we can bring our partners greater value.”
Christine Moy, Blockchain Program Lead at JPMorgan, also commented:
“One of the mandates of the J.P. Morgan blockchain program is to identify how blockchain technology can create value, efficiency, and a better experience for our clients across the financial markets value chain. This is an exciting example of how J.P. Morgan leveraged our combined capabilities in capital markets and blockchain technology, delivering results to a diverse set of clients. We look forward to exploring blockchain-enabled capital markets applications, how these types of transformative opportunities can benefit our clients and counterparts, and how working together on open source technology like Quorum can enable and accelerate this progress.”
NBC added that Goldman Sachs Asset Management, Pfizer, and Western Asset, a Legg Mason company, were among the investors in the Yankee certificate of deposit.