During the fourth and final day of Sibos, Chainlink co-founder Sergey Nazarov and Swift’s Head of Securities Strategy, Jonathan Ehrenfeld, appeared on Sibos TV to discuss why Swift’s collaboration with top banks on a blockchain interoperability model powered by Chainlink CCIP is a critical step toward the future of tokenized assets.
“We do believe that tokenized assets or digital assets are going to become mainstream very, very rapidly,” said Ehrenfeld, when asked why Swift sought to connect more than 11,500 banks to the blockchain economy through a single integration with CCIP.
By facilitating a hyper-connected global network or internet of contracts, CCIP would allow tokenized assets to flow freely between private bank chains and public DeFi applications, unlocking exciting new use cases like ANZ’s CCIP-powered reef credits.
Ehrenfeld believes tokenized assets will rely on custodians just like traditional assets. “These custodians need to connect to all of these chains, all of these platforms, in a secure, reliable, scalable way,” he explained. “So for us, it was very important to show that we can be that connectivity layer between banks, custodians, asset managers, and these new platforms.”
“The importance of being able to go on blockchains and transact on blockchains is going to acquire the same importance as being on the internet,” Nazarov said. “Corporations actually want to tokenize all the assets they can.”
In order for banks to create, buy, and sell tokenized assets representing real-world assets like real estate, art, and IP, they’ll need to transact with the entire blockchain ecosystem, which Nazarov envisions comprising hundreds of private bank chains.
“I think there will be multiple chains, hundreds of chains – at least one chain for every bank, probably multiple chains for every bank,” he said. “Once there’s multiple chains for every bank, you’ll end up needing to connect all those chains. Because if you have your own chain and that chain isn’t connected to the chain of your counterparty, then you’re kind of on this siloed island.”
Ehrenfeld said CCIP plays such a vital role in allowing banks to optimize blockchain technology because it allows them to connect with any chain through their existing backend infrastructure.
“Banks have like a million things to do, and all of these things have cost, all of these things are taking part of their margins out, etc.,” he explained. “If you can prove to the banks that they don’t have to invest massive amounts of money, but they can use their legacy systems to connect in a seamless way using infrastructure that they have already invested in, it’s a huge advantage for them. So for them, it’s a no-brainer.”
“Interoperability is a critical, fundamental component to any bank’s ability to make blockchains work for them,” Nazarov agreed. “And that’s why CCIP is getting so much adoption.”
Watch the full interview.