Today in Washington, D.C. at the DC Blockchain Summit, Chainlink co-founder Sergey Nazarov delivered a keynote address outlining three key steps toward American leadership in the emerging global web3 economy.
Having recently addressed the President at the White House Crypto Summit, where top officials expressed support for stablecoin and market structure legislation following an executive order to establish a strategic Bitcoin reserve, Nazarov described a big shift in American web3 strategy.
“The decisions that are going to be happening here over the next 18 to 24 months will indeed shape our industry both here in the U.S. and globally.”
He believes the U.S. must first focus on issuing the most abundant and reliable tokenized real-world assets (RWAs). Achieving the same majority in tokenized assets as stablecoins, over 90% of which are USD-backed, would be a “fundamental metric of success.”
The second step is automating compliance so that assets generated in the U.S. can be adopted around the world.
“If you don’t lower the transaction cost while you do create the best asset, the friction introduced for acquiring that asset will be too high,” Nazarov explained. “Even if the United States successfully generates all the best assets, it may not be the place that experiences the most demand to buy those assets if there’s too much friction.”
The third step is establishing global distribution.
“The DeFi community, the fintech community, and the institutional community can all play a very large role in taking those assets with a low cost of transaction and a low cost of compliance and acting as global distribution to get that capital to flow into the U.S. financial system.”
He believes stablecoin adoption reached a tipping point once stablecoins represented a significant percentage of U.S. Treasury notes and demand for tokenized RWAs will inevitably follow.
“This question of whether or not we care about web3-formatted assets will only accelerate, and the reason for that will not be political; it will be economic,” he said.
“That is a realization that will happen for all other assets – tokenized funds, tokenized equities, tokenized commodities, tokenized real estate – once they get high enough as a percentage of the market, the political system and the government has to address it, because it’s either a risk or an opportunity.”
As the standard for onchain finance, Chainlink supports three essential properties that establish tokenized RWAs as superior assets: real-time reserve verification through Proof of Reserve, secure and reliable interoperability through Cross-Chain Interoperability Protocol (CCIP), and automated compliance through Automation.
Nazarov believes every tokenized asset should function as a unified golden record that collects and maintains critical information about the asset, regardless of which chain it’s on.
“Most market issues are about lack of information,” he said. “This dynamic of creating a unified golden record is the critical next stage of how to manage risk and how to reduce the overall risk of assets in any financial system.”
Ultimately, he views the success of web3 in terms of tokenizing the highest-quality assets onchain.
“I think we can do that, but we absolutely have to collaborate with governments and the legal system to do that. And I think we’re in a very unique moment in time where that’s finally possible.”
Watch the full keynote.