Chainlink Completes Collaboration Pilot with U.S. Banks

The Depository Trust and Clearing Corporation (DTCC), the world’s largest settlement system, along with blockchain oracle Chainlink, recently concluded a pilot program involving several major US banking firms. The program aimed to facilitate the tokenization of traditional finance funds.

Known as the Smart NAV Pilot program, it sought to standardize the provision of net asset value (NAV) data for funds across different blockchains. This was achieved through the utilization of Chainlink’s Cross-Chain Interoperability Protocol (CCIP), as outlined in a DTCC report dated May 16.

According to the report, the pilot demonstrated that by delivering structured data on-chain and establishing standard roles and processes, foundational data could be integrated into various on-chain applications. These include tokenized funds and “bulk consumer” smart contracts, which manage data for multiple funds.

These capabilities not only pave the way for future industry exploration but also enable various downstream use cases, such as brokerage applications, streamlined data dissemination, and easier access to historical fund data. Additionally, the pilot facilitated better-automated data management, minimized disruption to existing market practices for traditional financial institutions, allowed clients to access historical data without manual record-keeping, and offered broader API solutions for price data.

Key NAV pilot takeaways. Source: DTCC

Several U.S. banking firms took part in the pilot, 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, Chainlink, surged by 12.5%, as reported by CoinGecko. Over the past 12 months, LINK has experienced a remarkable gain of over 130%, aligning with the broader upward trend in the cryptocurrency market.

The DTCC’s report coincides with growing interest in real-world asset tokenization among major traditional financial institutions.

For instance, on March 19, BlackRock introduced a tokenized money market fund (MMF) named BUIDL on the Ethereum network, offering native U.S. dollar yields. Investors can purchase tokens representing shares in the fund, which primarily invests in assets such as U.S. Treasury bills. Referred to as the “digital liquidity fund,” it operates as an ERC-20 token called BUIDL, fully digitized on the Ethereum blockchain.