In a new video, Chainlink co-founder Sergey Nazarov explained why Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is elemental to building a new global financial system powered by secure, reliable, compliant cross-chain transactions.
CCIP is the industry standard for digital asset and data transfer used by leading blockchains, layer-2s, DeFi protocols, and traditional financial institutions to unlock new use cases and markets for crypto, stablecoins, and tokenized real-world assets (RWAs).
Leveraging Chainlink’s battle-tested decentralized oracle network, which has enabled over $20 trillion in transaction value across 20+ blockchains, CCIP achieves the highest level of cross-chain security reinforced by a separate Risk Management Network.
Nazarov, who addressed the President at the White House Crypto Summit earlier this month, has since reiterated why the U.S. should capitalize on its new crypto-friendly regulatory environment by generating the most abundant, reliable tokenized RWAs that can be adopted around the world.
He distilled why CCIP is key to continuing America’s global leadership role in web3.
“You have a very high degree of security and reliability for high-value transactions. You have the ability to automate compliance and make sure that transactions can comply with various laws and regulations. And finally you have a kind of hyperconnectivity so that the counterparties on any chain that could ever want to acquire your asset can now acquire it through CCIP.”
He envisions a future where CCIP would ultimately allow the world’s value to be reformatted onchain within a global internet of contracts.
“The cross-chain CCIP primitive is a critical building block of how every new financial system will operate, because it’s what will connect all of the different chains – whether they’re central bank chains, TradFi-related chains, or DeFi public chains,” he said.
By atomically transferring digital assets packaged with critical information, such as identity data or proof of reserves, CCIP offers significant efficiency gains compared to current financial system infrastructure.
“Historically, you would transfer the payment over one rail, you would transfer the asset over another rail, and you would transfer the data about the payment and the asset on a third or fourth set of rails,” Nazarov explained.
“What’s happening with something like CCIP is you can transfer the asset, the payment, and all the data related to both the asset and the payment for compliance purposes on one rail.”
Watch the full video.