DTCC and Chainlink Lead Innovation in Fund Tokenization with Backing from Financial Giants

The Depository Trust & Clearing Corporation (DTCC), renowned as the largest global securities settlement system, announced the completion of a significant pilot in collaboration with Chainlink, an oracle platform for blockchains. This pioneering project, called Smart NAV, included the participation of major financial institutions, including JPMorgan, Franklin Templeton and BNY Mellon, aiming to boost the tokenization of funds.

The Smart NAV pilot aimed to create a standardized method for integrating and distributing fund net asset value (NAV) data across multiple blockchains, whether private or public. Chainlink’s CCIP interoperability protocol was used for this. The list of participants was impressive, ranging from American Century Investments to US Bank, MFS Investment Management and State Street.

Completing the pilot provided valuable insights. DTCC reported that “by making structured data available on-chain and establishing standard processes and functions, it has been possible to incorporate essential information into a diverse range of blockchain applications.” These include tokenized funds and smart contracts adapted for mass consumption, which can include data from multiple funds in a single contract.

This advancement comes at a time when the tokenization of real-world assets such as bonds and investment funds is gaining traction as one of the most promising uses of blockchain technology. Institutions such as BlackRock, Citi and HSBC have also explored this territory, seeking benefits such as operational efficiency, faster settlements and improved transparency compared to traditional financial management methods.

This pilot represents a significant milestone in the integration between conventional finance and emerging blockchain technologies, enhancing innovation in fund management and trading globally.

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