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Sergey Nazarov Says DTCC’s Chainlink Collaboration Will Lead To Large-Scale Fund Tokenization

Last month, the Depository Trust and Clearing Corporation (DTCC), a leading financial market infrastructure, announced the results of its Smart NAV industry pilot, which leveraged DTCC’s digital asset capabilities and Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to demonstrate how traditional financial institutions can deliver key mutual fund data onchain

Recently, Chainlink co-founder Sergey Nazarov sat down with Talia Kaplan on CNBC Crypto World to discuss how the collaboration between Chainlink, DTCC, and ten of the world’s largest financial institutions to bring net asset value (NAV) data onchain will advance cryptocurrency adoption and real-world asset tokenization throughout the global financial system.

“This collaboration shows the trend towards fund tokenization because this data is a critical part of administering a fund onchain,” Nazarov explained.

“And that is a very important trend because the onchain format for funds is a superior format in many ways. One way is that it conveys a lot more information to investors; another way is that it’s much more efficient and therefore the costs of operating funds go down.”

He described an incremental path toward fund tokenization by assembling different parts of a fund onchain. “In this case it was certain key pieces of data, but I think we will go to subsequent stages that will lead to wide-scale, large-scale fund tokenization,” he said. 

Chainlink provides a comprehensive suite of oracle services that are critical for creating, securing, and updating data-driven tokenized real-world assets throughout the multi-chain ecosystem, in which Nazarov believes individual banks and asset managers will generate their own tokenized assets on their own blockchain networks. 

“All these different institutions are going to have their own chains. They’re going to connect those chains, and they’re going to execute transactions across those chains, and that’s going to depend on the data within those transactions and it’s going to depend on the connection between those chains making the transaction possible.”

As the industry-standard decentralized computing platform, which has enabled over $12 trillion in transaction value, Chainlink provides the foundational data and cross-chain connectivity needed to unite decentralized finance and capital markets into what Nazarov envisions will be a single global internet of contracts where virtually all assets will be reformatted onchain

He highlighted the recent launch of BlackRock’s first tokenized fund as evidence of mounting interest in the blockchain and cryptocurrency industry from both institutions and the general public.  

“People understand that the traditional financial system can interact with cryptocurrencies and tokenized assets in meaningful, productive, secure, and reliable ways,” he said. “I think this has created a shift away from the scam-driven fears that people have about cryptocurrencies more towards what value can cryptocurrencies provide the financial system and now what value can real-world assets provide the financial system.”

Watch the full interview.

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