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Sergey Nazarov Envisions Bright Future For Tokenized Assets In Global Internet Of Contracts

Last week in Zurich, Switzerland during Point Zero Forum, an annual gathering of global financial regulators, policymakers, and industry leaders, Chainlink co-founder Sergey Nazarov joined FTS Group co-founder and Breaking Banks Europe host, Matteo Rizzi, to explore Chainlink’s work with TradFi giants such as Swift and Fidelity International on the path toward a tokenized future.

As the industry-standard decentralized computing platform, Chainlink has enabled over $12 trillion in transaction value and provides a comprehensive set of services that are critical for creating and securing tokenized real-world assets and stablecoins throughout the multi-chain economy.

Leading DeFi protocols and TradFi institutions are integrating Chainlink services such as Cross-Chain Interoperability Protocol (CCIP) to unlock new use cases and markets for tokenized real-world assets with unique onchain utility, such as atomic settlement, fractionalization, programmability, and the ability to serve as a unified golden record that combines ownership rights and vital asset data into a single continuously updated smart contract.

“[Chainlink is] both a solution to get data into chains and it’s a solution to connect chains and smart contracts across different blockchains, creating what we call an internet of contracts,” Nazarov explained.

As emphasized in his recent EthCC keynote, Nazarov believes the success of DeFi hinges on its compatibility with legacy financial infrastructure.

“My view, even from the very early days, was that the way to make a system successful is to make it compatible with other systems, so that both systems can end up doing something more valuable,” he told Rizzi. 

This philosophy inspired Chainlink’s work with Swift, the world’s largest provider of secure financial messaging services, through Swift’s Innotribe initiative, which Rizzi co-founded to bridge the gap between promising fintech startups and the traditional financial world.

“We thought it was a really good opportunity to see how some of the work we were doing on smart contracts would be compatible with the plans that Swift had on blockchains,” Nazarov explained.

Innotribe led to Chainlink and Swift’s initial proof of concept illustrating how smart contracts and decentralized oracle networks can simplify bond issuance and redemption through manipulation-resistant interest rate data. 

Last summer, Chainlink and Swift announced the success of a second proof of concept demonstrating how CCIP allows global financial institutions to transact with a wide range of private and public blockchains using their existing infrastructure.

“I enjoyed the experience of working with them and I think we saw a bright future,” Nazarov said. “My view is that we’re on track to do more together.”

During Point Zero, Chainlink announced a collaboration with Fidelity International and Sygnum to bring net asset value (NAV) data for Fidelity International’s $6.9 billion Institutional Liquidity Fund onchain.

At this year’s Consensus, Nazarov told Nasdaq TradeTalks’ Jill Malandrino that interest in tokenization is at an all-time high and highlighted the launch of BlackRock’s first tokenized fund as a watershed moment for TradFi’s participation in the digital asset economy.

“I think subsequent steps will be things like shortening the redemption period from month-long periods to maybe minute-long periods, so that you can redeem the fund more often because the data is available more often,” Nazarov told Rizzi. “And then the next steps will be moving the tokenized fund across many different chains. That’s how I see this and similar things evolving into the future, and Chainlink facilitates all of that data and movement of value and data across the various chains that would want to purchase a fund.”

Looking toward the future, Nazarov is most excited to see DeFi and TradFi members of the Chainlink ecosystem collaborate amongst each other.

“One of the most fulfilling things for me is seeing these users, both of which are originating or starting in the Chainlink ecosystem, start becoming each other’s users,” he said. “And what I’m really excited about seeing in the future is how a bank user of Chainlink can be a user of a DeFi protocol that’s also on Chainlink.”

Watch Breaking Banks Europe Episode 236: Point Zero Forum – Chainlink Takes Over.

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