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Sergey Nazarov Explains How Chainlink Is Bringing The World’s Banks Onchain

The recently released eighth episode of Chainlink’s “The Future Is On” spotlight series features Chainlink co-founder Sergey Nazarov, who explained how Chainlink is building blockchain infrastructure that accelerates global adoption of tokenized real-world assets by reducing the blockchain integration burden for traditional financial institutions.

“Chainlink is fundamentally a protocol that seeks to create the low-level standards for how the new web3-based financial system works,” Nazarov said. “By creating these standards, we enable everything to work in a transparent, cryptographically guaranteed way.”

As the industry-standard decentralized computing platform, Chainlink has already enabled over $12 trillion in transaction value and provides a comprehensive set of decentralized oracle services that are critical for creating and securing tokenized assets and stablecoins capable of scaling onchain finance to billions of global users.

Nazarov believes Chainlink’s Cross-Chain Interoperability Protocol (CCIP) will ultimately unite DeFi and TradFi on a global standard akin to how TCP/IP gave rise to a single internet. As illustrated by Swift’s proof of concept, financial institutions around the world can use their existing infrastructure and CCIP as a blockchain abstraction layer to transfer digital assets and data between a growing number of public and private blockchains.

In a future where individual banks and asset managers generate their own tokenized assets on their own blockchain networks, Nazarov said Chainlink solves two major problems facing banks: how to securely integrate with hundreds of counterparties on hundreds of chains and how to accomplish this using their existing systems with minimal investment.

“That’s where the Chainlink abstraction layer and CCIP have a big role to play, because with one integration, banks can integrate with hundreds of chains without having to ever actually go on any of those other chains, because they can use them from this one interface,” he explained. 

Leveraging Chainlink’s time-tested oracle infrastructure, CCIP achieves the highest level of cross-chain security and features a separate Risk Management Network that independently monitors cross-chain functions for suspicious activity. “The security and reliability of CCIP at this point is unsurpassed by any other system,” Nazarov said.

He expects all of the world’s value will ultimately be reformatted into a superior state onchain, since Chainlink-powered tokenized assets impart numerous benefits, such as atomic settlement, fractionalization, and programmability, while serving as a unified golden record that combines ownership rights and vital data about the underlying asset into a single continuously updated smart contract.

“This means we can generate the asset by enriching it; we can move the asset and provide it access to huge amounts of global liquidity; and as the asset moves wherever it’s going to result, we allow the asset to remain updated and remain a golden source of truth.” 

Watch the eighth episode of “The Future Is On” featuring Chainlink’s Sergey Nazarov.

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