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Sergey Nazarov: User Demand Will Drive Banks To Adopt DeFi

Global financial messaging provider, Swift, announced this week that it’s collaborating with more than a dozen of the world’s largest financial institutions and infrastructure providers to transact with a variety of public and private blockchains through a single integration of Chainlink Cross-Chain Interoperability Protocol (CCIP).

During an interview with Nasdaq TradeTalks’ Jill Malandrino, Chainlink co-founder Sergey Nazarov explained how Chainlink’s full suite of web3 services can support banks through all stages of blockchain adoption and reiterated his belief that mounting user demand for decentralized finance (DeFi) will ultimately require banks and fintechs to interact with the multi-chain economy.

In an interview with CNBC’s Tanaya Macheel, Nazarov expanded on how this latest collaboration between Swift and Chainlink paves the way for banks to ultimately create their own on-chain financial products.  

“This is actually something driven by customer demand,” he said. “Now clients are very actively asking banks to go beyond custody into the realm of making on-chain finance a reality, making on-chain financial products for their clients and allowing those different on-chain financial products to move between chains.”

He expects this latest proof of concept to demonstrate how banks can efficiently use Swift’s global messaging standard to seamlessly interact with various blockchains through Chainlink’s enterprise abstraction layer. As CCIP allows trillions of dollars from traditional financial markets to flow onto public blockchains, he believes DeFi will gain prominence as a superior financial system.

“I think it’s absolutely inevitable that all the value in the global financial system will be on a blockchain because of its security, transparency, and user control risk management properties,” he said. “In the long term, all banks and all payment systems will be on a blockchain, because that’s the superior way for them to interact.”

He explained how this shift would benefit banks. “It actually opens them up to entirely new global markets like DeFi and others which are only going to grow. So there’s more money to be made in larger markets.” For users, he emphasized, “There’s better risk management and there’s actual control and ownership of assets without third parties being able to keep them from you.”

Watch the full interview.

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