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Sergey Nazarov Says Interest In Tokenization At All-Time High

At this year’s Consensus, Chainlink co-founder Sergey Nazarov joined Nasdaq TradeTalks host Jill Malandrino on site in Austin, Texas to discuss the impact of DTCC’s Smart NAV pilot and how real-world asset tokenization could completely transform global finance. 

DTCC collaborated with 10 of the world’s largest financial institutions to develop a chain-agnostic model for bringing key mutual fund data onchain utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP) as a secure blockchain abstraction layer.

“This was an incremental step towards putting critical data onchain, which is a key building block of putting the fund itself onchain,” Nazarov told Malandrino. “We’re on a trajectory to put funds onchain in a way that will function across multiple chains.”

Nazarov views the growing interest in fund tokenization as part of a much larger shift driven by technological efficiencies that yield lower costs, easier administration, and faster transaction settlement. “Asset tokenization and onchain finance is really the new format for all financial products,” he said. 

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 assets throughout the multi-chain economy. As illustrated by Swift’s proof of concept, CCIP allows traditional financial institutions to transact with a wide range of private and public blockchains using their existing infrastructure.

“It’s called Chainlink for a reason, because it can connect your existing system to all of these hundreds of different chains through one interface,” Nazarov explained.

Reflecting on his experience at Consensus 2024, he believes traditional finance’s interest in blockchain technology is at an all-time high. 

“I would say that in 2024 we’re at a point where the capital markets industry has passed the tipping point of deciding that blockchain technology, smart contracts, and oracles are the way that value will be issued, managed, and transacted in the financial system,” he said.  

He highlighted the launch of BlackRock’s first tokenized fund as a watershed moment. “As the costs go down and the benefits go up, every firm has an inflection point, has a threshold, at which it will say, ‘It’s worth it for me to now participate in the digital asset economy.’”

Looking ahead, he underscored the enormous opportunities yet to unfold from the global financial system’s migration onchain. 

“I would say we’re in the very early stages of that, and that’s very positive for our industry because it means there’s a lot of continued growth to come over the next one, two, three, four, five, and I would even say 10 years.”

Watch the full interview.

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