At SmartCon 2023, Chainlink co-founder Sergey Nazarov joined Swift’s Tokenized Assets Product Lead, Thomas Dugauquier; Euroclear’s Business Analyst and Product Owner, Olivier Roucloux; SDX’s Head of Digital Securities, Alexandre Kech; and ANZ’s Director of Digital Asset Services, Anurag Soin, for a panel discussion about how banks are using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to unlock the future of digital assets onchain.
Euroclear, SDX, and ANZ were among a dozen top banks that participated in Swift’s proof of concept demonstrating how global financial institutions can transact with multiple blockchains using Swift’s private key infrastructure (PKI) and CCIP. The panelists underscored how important it is for banks to be able to connect with multiple blockchains using their existing infrastructure.
“We will need to interoperate existing standards with new standards,” Dugauquier said.
Roucloux anticipates a future where banks create digital assets on different chains. “We really see a lot of different asset classes,” he said. “We don’t believe each asset class will have a common blockchain all across the asset classes, so definitely I think we need to have an interoperability solution.”
“It’s inevitable that in the future we will live in a world of multiple private and public blockchains having to somewhat interoperate to ensure that assets can flow from one issuer to a client, one investor to another investor,” Kech agreed.
He compared using standards like Swift’s PKI and Chainlink CCIP to conducting SmartCon discussions in English. “Although it’s not our mother tongue, we need common standards and we need a way to communicate successfully together.”
Dugauquier summarized the achievement of Swift’s proof of concept, which “demonstrated that you can allow a bank to reuse an existing infrastructure to move assets seamlessly within a chain or across chains.” He described this capability as “a major building block that should be picked up by the industry to build business cases and use cases on top of it.”
Kech said the ability to rely on CCIP as a blockchain abstraction layer allows financial market infrastructures (FMIs) like SDX to focus on what they do best.
“Our job is not to play with technology; it is to offer services to our members that they can use – that a bond issued on blockchain is the same value of a bond issued on traditional finance for example – and therefore these interoperability solutions are critical.”
Soin extrapolated the success of Swift’s CCIP-powered interoperability model to over 11,000 financial institutions using Swift’s standard.
“The beauty of the Swift pilot was people can use their existing infrastructure and play in the digital assets world and that’s game-changing,” he explained. “You go from zero organizations to potentially 11,000 organizations who don’t have to worry about a gas token or wallet and start transacting in the world of web3. If there’s any way to get a billion users to change, this is one of the easiest.”
“If you want adoption, you need a return on investment,” said Roucloux. “The way to have a big return is to have a small investment.” By integrating CCIP to connect with blockchains using Swift’s existing messaging standard, he explained, “You will save a lot of money for the industry and you can have a massive adoption much faster.”
“Swift isn’t just a for-profit payment network; it’s a shared language,” Nazarov said. “It’s a shared way for people to align on how transactions work.”
He described the combination of Swift’s PKI and Chainlink CCIP as a way to accelerate the value blockchains bring to capital markets while allowing trillions of dollars in capital markets that is “already ready and waiting” to flow onchain.
“Enabling that will be, I think, a very big increase in what our industry is able to do and who it’s able to serve, which is what I think, at the end of the day, we’re all working on.”
Watch the full panel discussion.