The world’s largest settlement system, the Depository Trust and Clearing Corporation (DTCC), and blockchain oracle Chainlink have concluded a pilot program with several major U.S. banks, including JPMorgan and BNY Mellon, aimed at increasing the tokenization of traditional finance funds.
The Smart NAV Pilot program tested a method of bringing traditional finance fund data onto blockchains. It aimed to standardize the provision of net asset value (NAV) data of funds across blockchains using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), according to a May 16 DTCC report.
DTCC and Chainlink Pilot Reveals Benefits of On-Chain Fund Data
The pilot found 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. These contracts hold data for multiple funds, enabling more efficient and versatile financial operations.
These capabilities could support future industry exploration and power numerous downstream use cases like brokerage applications, more automated data dissemination, and easier access to historical data for funds. This would streamline various financial processes and improve overall efficiency.
The pilot also helped establish better-automated data management with limited impact on existing market practices for traditional financial institutions. It enabled clients to retrieve historical data without manual record keeping and provided broader API solutions for price data, according to the DTCC report.
The U.S. banking firms that participated in the pilot include American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street, and U.S. Bank.
Chainlink’s LINK Token Surges Following DTCC Report
Chainlink’s native token, LINK, rose 12.5% to $15.90 following the release of the DTCC’s report, according to CoinGecko. LINK has gained over 130% in the past 12 months amid a broader uptick in the crypto market.
The DTCC report highlights growing enthusiasm for real-world asset tokenization from major traditional financial institutions. This trend is reflected in recent initiatives like the one from BlackRock.
On March 19, BlackRock launched a tokenized money market fund (MMF) dubbed BUIDL on the Ethereum network, offering native U.S. dollar yields. The fund allows investors to purchase tokens representing shares in the fund, which invests in assets like U.S. Treasury bills. Known as the “digital liquidity fund,” it is digitized on the Ethereum blockchain and operates as an ERC-20 token called BUIDL.
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