Chainlink Powers Pilot with SBI and UBS for Tokenized Fund Operations Across Chains

An SBI and UBS pilot program that uses Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has been completed.

• Chainlink recently announced its CCIP Private Transactions to promote the privacy of data among financial institutions.

Chainlink (LINK) has announced that SBI Digital Markets & UBS Asset Management have successfully completed a pilot program using Chainlink’s industry-standard Cross-Chain Interoperability Protocol (CCIP). According to an attached release, the CCIP was used to create a digital transfer agent smart contract to facilitate cross-chain communication with the tokenized fund contract.

Using the Chainlink platform and the feasibility of smart contracts, the pilot demonstrated the feasibility of streamlining fund operations across different blockchains and financial systems to force a shift in operational efficiency and transparency for the mutual fund industry worth around $63 trillion.

We’re excited to announce that SBI Digital Markets & UBS Asset Management successfully completed a pilot using #Chainlink CCIP to streamline tokenized fund operations across different chains & financial systems. Explore the MAS Project Guardian use case: https://t.co/6pHX24meQy pic.twitter.com/7RJFMlqWnX— Chainlink (@chainlink) November 4, 2024

More About the Pilot Program

According to our research, the Project Guardian pilots led by the Monetary Authority of Singapore and participated by the SBI Digital Markets (SBIDM) are focused on driving commercial adoption. Meanwhile, SBIDM is also creating an end-to-end primary and secondary market distribution of tokenized securities. This is done through the connection of regulated digital asset exchanges across different regions in addition to collaboration with leaders in blockchain technology.

According to the Chief Executive Officer of SBI Digital Markets, Winston Quek, the team has adopted an “open and interoperable architecture in both operational structuring and tech engineering” to enable institutional investors to join the quest to unlock efficiencies via blockchain technology.

This year, SBI Digital Markets has focused its efforts on building regulated frameworks to facilitate the end-to-end flow of tokenized securities. From origination, tokenization, distribution, digital custody, listing on digital asset exchanges and building secondary trading – we have put in place workflows for efficient cross-border distribution networks whilst allowing for dual issuances in traditional and tokenized formats.

Delving deeper into the report, we uncovered that SBIDM has built on the success of its 2023 Project Guardian technical pilot with UBS Asset Management to achieve further operational efficiencies with smart contracts which are based on “automation of fund subscription and redemption workflows.”

Chainlink’s CCIP Private Transaction

Chainlink recently announced the launch of its CCIP Private Transactions to enable financial institutions to maintain data confidentiality. According to our report, Australia and New Zealand Banking Group (ANZ) was among the first to pilot its capabilities under the “Monetary Authority of Singapore (MAS) Project Guardian initiative.”

These new privacy capabilities allow institutional users to define privacy conditions in a manner that would privatize on-chain data from third parties. Commenting on this, Chainlink co-founder Sergey Nazarov explained that the blockchain industry has not provided sufficient privacy for financial institutions to integrate them successfully as far as institutional transactions are concerned.

Now that private transactions across chains are possible, we expect an even greater influx of institutional adoption of blockchains, CCIP, and the Chainlink standard in general. We are excited to continue our collaboration with ANZ and explore how to make large transactions across multiple chains in a way that helps meet their compliance and legal requirements, enabling their entry into the market and the growth of the entire blockchain industry through their exciting participation.

At press time, LINK was trading at $10.56 after declining by 8% in the last 24 hours.

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