Last week during Sibos, Distinguished Scientist at Chainlink Labs Dr. Dahlia Malkhi joined ANZ’s Nigel Dobson, SIX Digital Exchange’s Alexandre Kech, and Euroclear’s Stephanie L’Heureux for a panel discussion about “Blazing the trail towards an interconnected tokenised world” moderated by Swift’s Jack Pouderoyen.
Malkhi, who was formerly CTO and lead maintainer of Meta’s blockchain-based stablecoin payment system, Diem, as well as lead researcher at Novi, Meta’s digital wallet, shed light on the technical innovations that make tokenized assets a revolution in onchain finance.
“What’s special about tokens and the tokenized world is that an onchain and an offchain part can come together,” she said, highlighting Chainlink’s decentralized services such as Proof of Reserve, which allows onchain assets to uphold the value of offchain or real-world assets they represent.
“Of course, one of the things that happens outside a single blockchain platform is other blockchains,” she said, indicating the increasingly fragmented, multi-chain world which Chainlink’s Cross-Chain Interoperability Protocol (CCIP) aims to unite.
Swift’s collaboration with top banks to develop a CCIP-powered blockchain interoperability model is a critical step toward unlocking the full potential of tokenized assets by allowing them to move freely between private bank chains and public blockchain applications.
Dobson explained how CCIP makes blockchain adoption more accessible to banks by allowing them to connect with a wide array of public and private chains through their existing backend infrastructure including Swift’s PKI.
“You don’t have to make choices around the protocol on which digital assets sit or the ones you want to buy or trade sit,” he said. “Unifying those various chains and protocols with the CCIP protocol lowers the anxiety around liquidity fragmentation.”
“We don’t expect all the banks in the world to come to all the blockchains on day one,” Malkhi said. She explained how CCIP allows a bank on one blockchain to securely transact with a counterparty on another blockchain without either party holding an account or wallet on the other’s platform.
“So now you can really pull all the liquidity in all these chains in a way that they can interoperate and cross-operate together,” she explained.
The panelists agreed that traditional finance’s journey onchain will be slow and methodical, which makes CCIP’s interoperability with legacy infrastructure all the more important.
Dobson said a primary benefit of integrating CCIP is that it prepares banks for a variable future.
“It doesn’t actually matter” how many blockchains exist in five or ten years, he explained, so long as CCIP can “abstract away the complexity of that multi-chain environment.”
Malkhi agreed. “The future will be interoperable,” she said. “When anybody launches a new token or a new chain, the first question they will be asked is, ‘Is your chain already interconnected?’ Or maybe, ‘Is your chain already CCIP-connected?’”