Real-world asset tokenization is reportedly the next big frontier for the blockchain industry, and Chainlink continues to expand global partnerships with an emphasis on real-world asset tokenization and cross-chain transactions.
On May 21, The world’s largest blockchain oracle network announced that it is broadening its partnership with Arta TechFin, a Hong Kong-based asset manager and financial services company, to bring real-world assets on-chain.
Arta Techfin’s CEO, Eddie Lau, said the partnership “aims to satisfy market scarcity for an end-to-end solution that addresses pain points from off-chain primary origination and secondary trading to enhanced product integrity.”
According to Chainlink, real-world assets account for a whopping $867 trillion globally. Tokenization would increase the velocity of money by opening up previously illiquid assets, such as collectibles and real estate, to electronically tradeable markets.
Real estate, in particular, is notorious for being highly illiquid and incredibly difficult to transact. Assuming there is no cash buyer, a typical real estate transaction in the U.S. takes anywhere from 30 to 60 days to close.
Once the transaction is closed, reselling a home or tapping equity subjects the owner to complex and arcane processes that can likewise take months to complete.
At the heart of bringing real-world assets on-chain are Chainlink’s real-time price feeds and the CCIP interoperability protocol, which allow the oracle network to interact with other blockchains and shift assets between chains.
A graphic depicting a simplified explanation of Chainlink’s CCIP protocol, source: Chainlink.
In 2023, SWIFT, the interbank messaging protocol, announced it was collaborating with Chainlink to test transferring value between blockchain protocols.
Related: Chainlink to join Rapid Addition in building blockchain adapter for institutions
More recently, Chainlink conducted a similar pilot program with the Depository Trust & Clearing Corporation (DTCC) and several banking giants such as BNY Mellon, JP Morgan, and Edward Jones.
The slated goal of the pilot program was to bring fund data from the banks on-chain.
However, Chainlink is far from the only industry player focused on bringing real-world assets to the blockchain.
Firms like Ripple Labs continue to ink partnership deals with the purported goal of tokenizing real-world assets such as real estate, stocks, mortgages, and bonds.
According to CEO Brad Garlinghouse, Ripple entered into partnerships with JPMorgan, Santander, and IBM to tokenize assets on its blockchain ledger, a primary objective for the company.