The financial landscape is undergoing a transformation, driven by the potential of blockchain technology. A recent SWIFT report highlights this shift, with a staggering 97% of institutional investors believing tokenization holds the key to revolutionizing the asset management industry.
This week, a successful collaboration between Australia and New Zealand Banking Group (ANZ), Chainlink Labs, and Avalanche has taken a significant step towards this future. Their project focused on leveraging blockchain technology for the global movement and settlement of tokenized assets.
Traditionally, the settlement of securities relies on a process known as Delivery versus Payment (DvP). This ensures that payment and delivery occur simultaneously, minimizing risk. However, legacy DvP processes are often cumbersome. Blockchain technology, with its smart contract capabilities, offers an opportunity to streamline this process.
“Chainlink CCIP played a key role in abstracting away the blockchain complexity of moving tokenized assets across different chains and ensuring atomic cross-chain DvP,” said Lee Ross, Technology Domain Lead, ANZ.
In this project, ANZ utilized Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to demonstrate seamless cross-chain DvP settlement. This involved simulating the purchase of tokenized assets on Ethereum, denominated in one stablecoin, with the transaction initiating and settling on Avalanche using another stablecoin.
ANZ Leverages Avalanche’s Evergreen Subnets
For this initiative, ANZ employed its own Avalanche Evergreen Subnet. These subnets offer several advantages, including compatibility with the Ethereum Virtual Machine (EVM), permission access control, and the ability to utilize customized gas tokens.
“Avalanche’s Evergreen Subnets have allowed ANZ to join the list of institutions exploring new use cases and business models while leveraging customizable networks like Avalanche,” said Anurag Soin, Product Lead Digital Added Services at ANZ.
The ANZ project serves as a testament to the burgeoning On-Chain Finance (OnFi) ecosystem on Avalanche, which bridges the gap between traditional finance (TradFi) and decentralized finance (DeFi). This collaboration signifies a growing trend of established financial institutions exploring the possibilities of blockchain technology.
“This ANZ project illustrates how innovative traditional financial service providers are preparing for a new version of capital markets enhanced by blockchain,” said John Wu, President of Ava Labs.
This collaboration between ANZ, Chainlink, and Avalanche represents a significant leap forward in streamlining the settlement of tokenized assets. As the technology continues to develop, we can expect to see further innovation and adoption within the financial sector.
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