Sibos, the world’s premier financial services event organized by global financial infrastructure provider, Swift, kicked off this morning in Toronto, where Chainlink co-founder Sergey Nazarov took the stage in front of a packed house of global banking representatives and industry leaders to explain how Chainlink’s Cross-Chain Interoperability Protocol (CCIP) empowers thousands of global banks to take digital real-world assets to the next level.
Swift recently shared the success of its collaboration with a dozen top banks and financial infrastructure providers to develop a blockchain interoperability model powered by CCIP. The findings illustrated how over 11,500 banks using Swift’s PKI can leverage a single integration with CCIP to securely transfer tokenized assets between public and private blockchains.
“CCIP solves the problem of connecting to blockchains efficiently with one integration without having to integrate with hundreds of blockchains,” Nazarov told his Sibos audience. Anticipating a future where each bank launches its own private chain to create and distribute digital assets, he said manually integrating with thousands of other bank chains simply wouldn’t be feasible.
Just as TCP/IP connects disparate systems into one internet protocol, CCIP is a universal standard that would connect different blockchains into one 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.
“Any real-world asset, stablecoin, or any other product that goes live on your chains now has access to global liquidity and markets,” Nazarov explained.
“Every bank I talk to is making their own chains. If those chains aren’t connected, you don’t have liquidity, you don’t have access to the other counterparties that have their own chains. It’s a very fundamental problem that’s inescapable.”
CCIP’s key innovations include a separate Risk Management Network that can be configured to accommodate different users, counterparties, and risk parameters, as well as cross-chain messaging that relays data along with digital assets.
“Yes, you want to transmit value, but you actually want to also transmit instructions about what the value is about and what the value will be able to do,” Nazarov said.
CCIP allows banks to send tokens cross-chain with directions for how an asset should be utilized on the destination chain. “You never need to make a wallet on that chain, you never need to integrate with that chain, you never need to learn that chain,” Nazarov explained.
CCIP’s global messaging standard works alongside Chainlink Data Feeds, which have securely enabled over $8.5 trillion in transaction value, and services such as Proof of Reserve to automatically update on-chain assets to reflect real-world data.
“You can make your tokenized gold coin but then you need to inject information into it,” Nazarov said. “You need to inject proof of reserves, proving that there is actually gold backing the coin.”
All of this information forms what Nazarov calls a “golden record.” He said Chainlink oracle networks and services like CCIP not only facilitate the creation of real-world assets and enable their cross-chain movement, but also consistently update and maintain vital data points – which is crucial because, as Nazarov put it, “A golden record needs to stay golden.”