Interbank messaging system Swift and Web3 services platform Chainlink have successfully transferred tokenized value across multiple private and public blockchains in recent experiments, a Thursday press release said.
"The findings have potential to remove significant friction slowing the growth of tokenized asset markets and enable them to scale globally as they mature," the press release said.
In June Chainlink and Swift announced that they would be collaborating with dozens of financial institutions to test how they can connect with multiple blockchain networks. BNP Paribas, BNY Mellon, The Depository Trust & Clearing Corporation and Lloyds Banking Group and others collaborated with Swift on the experiments.
Financial institutions around the world are increasingly experimenting with asset tokenization with the goal of improving financial markets. A recent report from the Hong Kong Monetary Authority said tokenization could help improve efficiency and transparency in bond markets.
"For tokenization to reach its potential, institutions will need to be able to seamlessly connect with the whole financial ecosystem. Our experiments have demonstrated clearly that existing secure and trusted Swift infrastructure can provide that central point of connectivity, removing a huge hurdle in the development of tokenization and unlocking its potential," Tom Zschach, chief innovation officer at Swift said in a press statement.
Swift used Chainlink's Cross-Chain Interoperability Protocol (CCIP) to connect with different blockchains. Chainlink’s CCIP, which is designed to help build cross-chain applications and services, went live in July.
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Edited by Sandali Handagama.
