Intraday liquidity Meaning

The funds that are available to a financial institution during the business day to enable it to make payments and settle obligations as they arise. It is the "fuel" that keeps the global payment system running smoothly from minute to minute.

Managing intraday liquidity is a high-stakes balancing act. If a bank doesn't have enough "cash on hand" at 11 AM to settle a large transfer, it might have to borrow from another bank or the central bank, which can be expensive.

If they have too much, they are losing out on potential interest by keeping the money "idle." In a world of 24/7 markets and "instant" transfers, the demand for intraday liquidity is increasing. Traditional banks are now looking at "on-chain" solutions-like JPM Coin-to manage their liquidity in real-time.

By moving value between branches and partners on a 24/7 ledger, they can reduce the amount of "dead" capital they need to hold, making the entire financial system more efficient.