This week at Singapore FinTech Festival, Chainlink co-founder Sergey Nazarov joined Nasdaq TradeTalks host Jill Malandrino to discuss how Chainlink is unlocking the future of cross-border transactions through a number of important use cases under the Monetary Authority of Singapore’s Project Guardian – a multi-year collaboration between policymakers and the financial industry to enhance liquidity and efficiency through real-world asset tokenization.
This week, Swift, UBS Asset Management, and Chainlink announced the success of an innovative pilot demonstrating how digital asset transactions can settle with fiat payment systems.
“That means that the +11,000 bank members within the Swift network should be able to use Swift messages to allow their users to utilize various tokenized funds, which means that very large user base is now able to use all the tokenized financial products that go onchain,” Nazarov said.
The pilot builds on work from UBS Asset Management and SBI Digital Markets to create a digital subscription and redemption system for tokenized funds using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), the industry standard for digital asset and data transfer.
Nazarov emphasized the fundamental role of Chainlink’s infrastructure, including CCIP and the Chainlink Runtime Environment (CRE), in accelerating blockchain adoption by making new technology compatible with legacy financial systems.
“Traditional banks and asset managers want to give their user bases access to more and more onchain financial products, but they want to utilize their existing infrastructure,” he said.
“That’s the role that Chainlink plays in this context: it allows their existing banking systems, payment systems, identity systems to be made compatible with blockchains and therefore reusable for onchain transactions.”
The launch of CCIP Private Transactions at Sibos marked a pivotal moment in blockchain adoption by allowing institutions to define conditions that permit authorized parties to verify certain data for compliance while keeping that same data private from unauthorized third parties and adversaries. ANZ, one of the largest banks in the Asia-Pacific region with over 1.1 trillion AUD in assets, will be the first to pilot this technology as part of Project Guardian.
“The traditional financial industry is used to having privacy and confidentiality for their transactions and Chainlink provides that confidentiality into the blockchain version of their transactions,” Nazarov said. “You can not only get your systems to interact, but you can achieve the privacy that’s required.”
Yesterday, Chainlink, ANZ, and Singapore-based investment platform ADDX announced an end-to-end solution for streamlining the life cycle of tokenized commercial paper using CCIP Private Transactions to maintain confidentiality and meet regulatory requirements.
Nazarov described the pilot as a breakthrough in private transactions, which have been one of the biggest obstacles preventing blockchain and digital asset adoption in capital markets.
“What that shows is the ability for CCIP to generate a lot of cross-border compliance and privacy,” he said.
“A lot of those compliance issues and privacy issues that are important – them being resolved is the critical component to now go into production. And the way CCIP is built is to fulfill those compliance needs and those legal obligations.”
Watch the full interview.