The Depository Trust and Clearing Corporation (DTCC), the world’s largest securities settlement system, recently completed a pilot project called Smart NAV in collaboration with blockchain oracle provider Chainlink and several major U.S. financial institutions.
The aim of the pilot was to establish a standardized process for bringing net asset value (NAV) data of funds across multiple blockchains, a crucial step towards the tokenization of funds.
TLDR
- DTCC and Chainlink completed a pilot project called Smart NAV with major U.S. financial institutions to help accelerate fund tokenization.
- The pilot aimed to establish a standardized process for bringing net asset value (NAV) data of funds across multiple blockchains using Chainlink’s CCIP.
- Participants included JPMorgan, BNY Mellon, Franklin Templeton, and other major U.S. banks and investment firms.
- The pilot found that delivering structured data on-chain and creating standard roles and processes could support various use cases like tokenized funds and bulk consumer smart contracts.
- Chainlink’s native token LINK gained over 10% following the news of the successful pilot.
Participants in the pilot included JPMorgan, BNY Mellon, Franklin Templeton, American Century Investments, Invesco, State Street, and other prominent U.S. banks and investment firms.
The project utilized Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to facilitate the dissemination of fund data across various blockchains.
We’re excited to share the results of a new Smart NAV industry pilot between @The_DTCC, Chainlink, and 10 of the world’s largest financial institutions that delivered key mutual fund data onchain.
Full report: https://t.co/ob3K0s4g86
The significance for fund tokenization ???? pic.twitter.com/74zocXa2s0
— Chainlink (@chainlink) May 16, 2024
The successful completion of the pilot demonstrated that by delivering structured data on-chain and creating standard roles and processes, foundational data could be embedded into various on-chain use cases.
These include tokenized funds and bulk consumer smart contracts, which are contracts that hold data for multiple funds.
The pilot’s findings suggest that this approach could support future industry exploration and power numerous downstream applications such as brokerage applications, automated data dissemination, and easier access to historical fund data.
.@SergeyNazarov on the significance of the DTCC Smart NAV pilot with Chainlink: https://t.co/Jx4LhOxh2u pic.twitter.com/LWXQCYbBxI
— Chainlink (@chainlink) May 16, 2024
The Smart NAV pilot also highlighted several benefits, including better-automated data management, limited impact on existing market practices for traditional financial institutions, the ability for clients to retrieve historical data without manual record-keeping, and broader API solutions for price data.
Following the announcement of the successful pilot, Chainlink’s native token LINK experienced a significant price increase, gaining over 10% and reaching $16.
This surge in price can be attributed to the growing interest in real-world asset tokenization among major traditional financial institutions, as well as the broader bullish sentiment in the cryptocurrency market.
People don't realize how big the recent @chainlink news is with the Smart NAV pilot.
In 2022 alone, DTCC settled around $2.5 quadrillion in transactions. In short, they are huge.
They are the middleman of the financial industry. Whenever securities are bought and sold, they… pic.twitter.com/2OzSvzvbYo
— Minty (@DeFiMinty) May 17, 2024
As the tokenization of real-world assets continues to gain traction, the collaboration between DTCC, Chainlink, and major U.S. financial institutions marks a significant step forward in bridging the gap between traditional finance and blockchain technology.
The successful completion of the Smart NAV pilot lays the groundwork for future initiatives aimed at streamlining the tokenization process and unlocking new opportunities in the financial industry.
