Wall Street Banks Test Tokenization with Chainlink, DTCC

• Chainlink, DTCC pilot tests tokenization of funds.
• Project involved major US banks like BNY Mellon, JPMorgan.
• Success paves way for wider use of blockchain in finance.

Blockchain oracle company Chainlink, in collaboration with the Depository Trust and Clearing Corporation (DTCC), has completed a pilot program aimed at accelerating the tokenization of traditional financial funds. The project, dubbed Smart NAV, involved several prominent U.S. banks and explored the use of blockchain technology for disseminating fund data.

The pilot program included participation from major financial institutions such as American Century Investments, BNY Mellon, and JPMorgan. According to a DTCC report, the project successfully demonstrated the feasibility of embedding standardized fund data onto blockchains. This approach, the report suggests, could facilitate the development of various applications within the tokenized finance space, including brokerage portfolio tools.

The DTCC report also highlights the potential benefits of the pilot program for data management within the financial sector. The use of on-chain data storage offers the potential for improved data dissemination and easier access to historical information. Based on the success of the pilot, the DTCC has proposed expanding the program’s scope to explore a wider range of use cases and integrate with additional blockchains.

Tokenization, the process of converting traditional assets into digital tokens on a blockchain, is gaining traction within the financial industry. Major financial institutions, including BlackRock and HSBC, are actively exploring the potential applications of this technology. The Chainlink-DTCC pilot program signifies the growing interest in tokenization among leading U.S. banks and could pave the way for broader adoption in the future.