Yesterday marked the start of Sibos, the world’s premier financial services event organized by global financial infrastructure provider, Swift. After his keynote illustrating how Chainlink’s Cross-Chain Interoperability Protocol (CCIP) empowers banks to unlock the full potential of digital assets, Chainlink co-founder Sergey Nazarov joined Nigel Dobson, Banking Services Lead at ANZ, for a fireside chat about exciting use cases powered by CCIP.
As one of the largest institutional banks in Australia, ANZ is among a dozen global banks and financial infrastructure providers that collaborated with Swift to develop a blockchain interoperability model that would allow over 11,500 banks to securely transfer tokenized assets between public and private blockchains through Swift’s PKI and CCIP.
ANZ is currently utilizing CCIP to power cross-chain, cross-currency real-world assets in the form of green financial products, such as reef credits, a financial incentive for farmers and land managers to reduce their crops’ nitrogen runoff in an effort to protect the Great Barrier Reef.
“We have customers who want to own these credits,” said Dobson. He highlighted fractionalized tokenized assets as particularly appealing to brands that want to sell green credits alongside their products.
Dobson described the ability for banks to utilize blockchain technology through CCIP as “a substantial uplift” to the operating model behind green financial products like carbon credits and offsets “which are basically still traded on the phone, over the counter.”
“The ability to leapfrog to the most contemporary type of financial market infrastructure for an asset class that we care deeply about, that we have invested in, is really exciting for us,” he said.
With more than 90% of institutional investors interested in tokenized products, Dobson said ANZ aims to satisfy demand for an array of tokenized real-world/nature-based assets.
“As a bank, we’re saying that, not too far away, digital wallets are going to be the stablemate for bank accounts. We want to facilitate that capability, so that when we do have customers who want to either give or gift or trade with nature-based assets that we’ve tokenized, they can hold them as offset to retire or they can give them to their customers. There’s a whole bunch of use cases that can explode from there.”
CCIP allows banks like ANZ to use their existing APIs to connect with private and public blockchains in what Nazarov calls an internet of contracts. Such a hyper-connected global network would exponentially increase the utility of tokenized real-world assets by allowing them to flow freely between private bank chains and public DeFi applications.
Dobson said CCIP allows ANZ to unite different ledgers on different infrastructures, reducing transaction times from days to minutes.
CCIP also enables cross-chain messaging, which transmits data that ensures on-chain assets reflect real-world markets and directs the use of cross-chain assets on their destination chains.
“The value and the message moving together is revolutionary,” said Dobson. “That’s a real breakthrough.”
Looking ahead five to ten years, Nazarov envisions a world where banks are heavily invested in tokenization.
“Every bank is going to have its own chain,” he said. “Every bank is going to have its own stablecoin. Every bank is going to have hundreds of real-world assets.”
Highlighting pioneers like ANZ, Nazarov concluded, “I think the banks that take the first steps to create those assets will be very successful, just like the first banks that had a big role to play with digitized market data and the first banks that had a big role to play in the internet.”