Australia and New Zealand Banking Group (ANZ) has joined forces with Chainlink and Avalanche to explore the settlement of tokenized assets across different blockchains. This collaboration signifies the growing interest in blockchain technology from traditional financial institutions aiming to improve legacy systems.
The core challenge this initiative addresses lies in blockchain networks’ current fragmented nature. Traditionally, settling assets required navigating separate blockchains which was hindering global circulation and efficiency.
ANZ, by leveraging Chainlink’s Cross-Chain Interoperability Protocol (CCIP), successfully simulated the purchase of tokenized assets on Ethereum and settlement on Avalanche and demonstrated the potential for seamless cross-chain transactions.
This project highlights the potential of blockchain technology to revolutionize traditional Delivery vs. Payment (DvP) processes which is a core function in securities settlement. By tokenizing assets and payments on the same infrastructure, blockchain offers the possibility of atomic, non-intermediated DvP settlement and potentially reducing risks and streamlining processes.
Lee Ross, Technology Domain Lead of ANZ was quoted stating,
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.
The successful test conducted by ANZ paves the way for further exploration of on-chain asset settlement. This collaboration between a traditional financial institution and blockchain innovators like Chainlink and Avalanche signifies a growing embrace of blockchain technology within the financial sector. The project’s success points toward a future where tokenization and On-Chain Finance (OnFi) play a significant role in reshaping global financial infrastructure.
The encouraging results from this initial testbed have spurred plans to deploy the solution on mainnets and expand its functionalities. This could involve enabling communication between various blockchain networks for a wider range of use cases within the financial services industry.
This project adds to the growing momentum surrounding Avalanche’s Evergreen Subnets which allow institutions to explore blockchain applications in customized environments. The success of this collaboration underscores the potential of blockchain technology to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), paving the way for a more efficient and interconnected financial future.
Anurag Soin, the Product Lead for Digital Added Services at ANZ expressed excitement at the prospect of further exploring how blockchain, smart contracts and tokenization can enhance the global financial system stating,
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.
Recently, Layergg’s analysis revealed a significant shift in the cryptocurrency landscape towards Real World Assets (RWAs) especially after the Bitcoin ETF launch. This trend attracted interest from traditional finance sectors with firms like BlackRock and Fidelity leading the way.
