DTCC and Chainlink Collaborate with Major US Banks in Pilot Program to Advance Tokenization in Traditional Finance
The Depository Trust and Clearing Corporation (DTCC), the world’s largest settlement system, has joined forces with blockchain oracle Chainlink to successfully complete a pilot program involving several prominent US banking institutions. The main objective of the program was to enhance the tokenization of traditional finance funds.
The pilot program, known as the Smart NAV Pilot, focused on establishing a standardized method for providing net asset value (NAV) data of funds on blockchains. Chainlink’s Cross-Chain Interoperability Protocol (CCIP) played a crucial role in achieving this goal.
The DTCC’s report reveals that the program demonstrated the delivery of structured data on-chain, opening the door for various on-chain use cases such as tokenized funds and “bulk consumer” smart contracts that hold data for multiple funds. The successful outcomes of the pilot program have significant implications for future industry exploration and the enablement of numerous downstream use cases.
These use cases include brokerage applications, more automated data dissemination, and easier access to historical data for funds. The DTCC’s report highlights that the program facilitated better-automated data management, minimal disruption to existing market practices in traditional financial institutions, retrieval of historical data without manual record-keeping, and broader API solutions for price data.
Prominent US banking firms actively participated in the pilot program, including American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street, and U.S. Bank. Following the release of the DTCC’s report, Chainlink’s native token, LINK, experienced a 12.5% increase in value. Over the past year, LINK has demonstrated significant growth, gaining over 130% amidst the broader uptick in the cryptocurrency market.
The DTCC’s report aligns with the growing interest among major traditional financial institutions in tokenizing real-world assets. On March 19, BlackRock, a leading investment management firm, introduced a tokenized money market fund called BUIDL on the Ethereum network. The fund allows investors to acquire tokens representing shares in the fund, which primarily invests in assets such as U.S. Treasury bills. Operating as an ERC-20 token called BUIDL, the fund is often referred to as the “digital liquidity fund” due to its digitized nature on the Ethereum blockchain.
As reported, the total value locked (TVL) for real-world asset (RWA) protocols reached nearly $8 billion by the end of April. Certain protocols have played a significant role in driving this growth, particularly in terms of active users. Digital carbon market platforms like Toucan and KlimaDAO, as well as the real estate tokenization protocol Propy, have experienced substantial user growth. Tokenized treasuries have also seen remarkable expansion as yields remain high in an environment of elevated inflation and interest rates in the United States. The RWA.xyz platform reported a record $1.29 billion locked-in tokenized U.S. treasuries and bonds, representing an 80% surge since the beginning of 2024.
Back in March, Singapore-based fintech company DigiFT announced its entry into the digital asset realm with the launch of its US Treasury bill depository receipt (DR) tokens.
Follow Us on Google News
