As a researcher with a background in traditional finance and blockchain technology, I’m excited about the recent collaboration between the Depository Trust and Clearing Corporation (DTCC) and Chainlink on the Smart NAV Pilot program. The potential of this partnership to increase tokenization of traditional funds is significant, as it aims to standardize net asset value (NAV) data across blockchains using Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
As a crypto investor, I’m excited to share that the Depository Trust and Clearing Corporation (DTCC) and Chainlink have recently completed a pilot project involving some prominent US banks. The goal of this collaboration was to enhance the tokenization process for traditional finance funds. In simpler terms, they’ve been exploring how blockchain technology, represented by Chainlink, can be integrated with DTCC’s vast settlement system to make fund tokenization more efficient and accessible.
A May 16 DTCC report revealed that the Smart NAV Pilot program aimed to establish a consistent approach for delivering net asset value (NAV) information of funds between blockchains, leveraging Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
“The pilot found that by delivering structured data on-chain and creating standard roles and processes, foundational data could be embedded into a multitude of on-chain use cases, such as tokenized funds and ‘bulk consumer’ smart contracts, which are contracts that hold data for multiple funds,” it wrote.
These functions have the potential to expand industry investigations in the future while also driving various downstream applications such as brokerage systems, enhanced data distribution, and simpler access to historical data for investment firms.
According to the DTCC’s report, the pilot successfully implemented more automated data management systems, minimally affecting conventional financial institutions’ established market procedures. This innovation allowed clients to access historical data effortlessly without relying on manual record keeping. Additionally, it expanded API solutions for obtaining price information.
Among the American banking institutions that took part in the trial are: American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street, and US Bank.
According to CoinGecko’s data, the price of Chainlink’s native token, LINK, experienced a 12.5% increase after the publication of the DTCC’s report.
LINK has gained over 130% in the last 12 months amid a broader uptick in the crypto market.
The DTCC report emerges amidst growing excitement from significant traditional financial players regarding the tokenization of real-world assets.
Starting on March 19, BlackRock introduced a tokenized money market fund named BUIDL on the Ethereum blockchain, providing users with native U.S. dollar returns.
With this fund, investors can buy digital tokens that mirror shares in the investment pool. The assets the fund holds include U.S. Treasury bills. This digital investment vehicle is known as the “digital liquidity fund” due to its existence on the Ethereum blockchain and being represented by an ERC-20 token named BUIDL.
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2024-05-17 04:28