OCBC demonstrates intraday institutional lending capabilities

It made use of reverse repos on J.P. Morgan’s Digitial Financing app.

OCBC now has intraday institutional lending capabilities, reportedly the first bank in Singapore to offer this.

The bank seeks to maximise returns from its excess intraday liquidity, according to the press release.

OCBC made use of reverse repurchase transactions (reverse repos) on J.P. Morgan’s Digital Financing app, built on the Onyx Digital Assets platform. OCBC lends cash to J.P. Morgan and accepts tokenized securities as collateral.

Such transactions can be completed within the day as the exchange of cash and  tokenised securities through the blockchain is near instantaneous.

In contrast, the exchange of cash and collateral typically takes at least one  business day in the traditional repo market due to manual processes.

OCBC’s first reverse repo was completed 11 October 2024 with a maturity of less than 120 minutes.

At maturity, the principal cash amount was returned to OCBC together with interest, and  OCBC released the tokenised securities back to J.P. Morgan.  

In addition to the reverse repo, OCBC also executed a separate intraday repo as a cash borrower on the same day.

Both the reverse repo and repo were denominated in US dollars, but transactions denominated in euros are  also currently supported on Digital Financing.

Euroclear’s triparty service facilitated the securities tokenization process for the pair of transactions.