Chainlink and the DTCC have completed tests with JPMorgan, Templeton, BNY Mellon, and other major US banks to accelerate the tokenization of funds. The pilot project, named Smart NAV pilot, tested a process to bring and disseminate fund data on multiple blockchains. Accomplishing this is a key step for the future of tokenization.
Participants in the trial included American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street and U.S. Bank.
According to the report, the DTCC discovered in the trial that “by delivering structured data on-chain and creating standard roles and processes, foundational data could be embedded into a multitude of on-chain use cases, such as tokenized funds and ‘bulk consumer’ smart contracts, which are contracts that hold data for multiple funds.” The Chainlink trial revealed capabilities that support future industry exploration of tokenization. This includes cases such as brokerage portfolio applications. The report adds real-time benefits including more automated data dissemination and built-in access to older information.
“Based on these findings, we see an opportunity to potentially expand the scope of the pilot to explore how the technical capability leveraged in the pilot could power a broader range of use cases beyond the dissemination of price and rate data and across a greater number of blockchains,” the DTTC added in their note.
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Chainlink Continues Tokenization Trials With DTCC
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There have been similar trials in the past around the tokenization of real-world assets. The concept of tokenization is growing in popularity and is now a top use of blockchain technology. Tokenization brings benefits including operational efficiencies, speedier settlements, and increased transparency compared to using traditional financial plumbing.
Major financial institutions including BlackRock and HSBC have begun exploring the tokenization concept already. With the growing reliance on blockchain technology in finance, tokenization is becoming a favorable option. The implementation of the concept into big banks like Citi and JPMorgan Chase would be huge, showing tokenization is beneficial.