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U.S. Banking Giants Experiment with Tokenization Using a Specific Cryptocurrency

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As the largest settlement system in the world, the Depository Trust and Clearing Corporation (DTCC) has partnered with blockchain oracle Chainlink (LINK) to complete a pilot program with multiple significant U.S. banking companies.

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This initiative’s main objective was to progress the tokenization of conventional finance funds.

After it was revealed that DTCC had successfully completed the tokenization pilot, there was a noticeable 20% increase in the value of Chainlink’s token.

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This trial combined blockchain technology with traditional finance by utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP), which was participated in by well-known Wall Street companies like JP Morgan (NYSE: JPM) and BNY Mellon.

The company recently finished the trial program, called Smart NAV, in cooperation with Chainlink, according to a DTCC report. The program’s goal was to investigate a potential expansion of Mutual Fund Profile Service I (MFPS I), a DTCC service that is the industry standard for transmitting “Price and Rate” data, or “NAV data.”

The pilot demonstrated how foundational data could be used in a variety of on-chain use cases by providing structured data on-chain and standardizing roles and procedures. These included bulk consumer smart contracts, which store data for several funds, and tokenized funds.

Among the notable participants were U.S. Bank, Mid Atlantic Trust, American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, and State Street.

Market Reactions and Price Fluctuations

The value of Chainlink’s native token, LINK, increased by 12.5% after the publication of the DTCC report. As of this writing, LINK’s market capitalization had risen by 14% in the previous 8 hours, pushing it over $16. This led to the liquidation of $1.96 million in short positions that had been held over the previous 24 hours.

The market’s favorable response to the possibility of fusing blockchain technology with traditional finance is evident in the price spike of LINK.

The real-world asset (RWA) tokenization trend that major traditional financial institutions are displaying a growing interest in includes this pilot program.

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Finbold reported that as demand increased, the value of tokenized real-world assets skyrocketed to almost $8 billion.

For example, BlackRock (NYSE: BLK) debuted BUIDL, a tokenized money market fund, on the Ethereum (ETH) network on March 19. Investors can purchase tokens in this fund, which mainly invests in U.S. Treasury bills, to represent shares in the fund.

The Future of Tokenized Assets

Wall Street companies have been interested in blockchain technology for a while, but they have frequently been hesitant to use public blockchains.

A number of well-known companies, such as Microsoft (NASDAQ: MSFT) and Goldman Sachs (NYSE: GS), became members of the Canton Network in 2023. This private pilot network was established to enable major institutions to investigate decentralized infrastructure.

The objective of the new Chainlink test is to acquire Wall Street data directly from the institutions and make it accessible on public networks for use by smart contracts and other Real World Asset protocols. This makes the test unique.

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This represents a major advancement in integrating blockchain technology with mainstream finance, showcasing the potential for real-time automated data dissemination and seamless access to historical data.


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