DTCC, Chainlink complete fund data tokenization pilot with U.S. banks

The DTCC and Chainlink have finished a pilot with several major U.S. banks aiming to increase the tokenization of traditional finance funds.
The DTCC and Chainlink have finished a pilot with several major U.S. banks aiming to increase the tokenization of traditional finance funds.

The world’s largest settlement system, the Depository Trust and Clearing Corporation (DTCC), and blockchain oracle Chainlink have wrapped up a pilot program with several major banking firms in the United States aimed at increasing traditional finance fund tokenization.

The Smart NAV Pilot program was conducted to standardize a method of providing net asset value (NAV) data of funds across blockchains, using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), according to a May 16 DTCC report.

“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, which are contracts that hold data for multiple funds,” it wrote.

These capabilities could support future industry exploration as well as powering “numerous downstream use cases” like brokerage applications, more automated data dissemination, and easier access to historical data for funds, it said.

The pilot helped establish better-automated data management, limited impact on existing market practices for traditional financial institutions, enabled clients to retrieve historical data without manual record keeping, and provided broader API solutions for price data, the DTCC’s report noted.

Key NAV pilot takeaways. Source: DTCC

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.

Related: Deutsche Bank joins Singapore’s asset tokenization project

Chainlink’s native token Chainlink (LINK) rose 12.5% following the DTCC’s report, according to CoinGecko.

The price of LINK spiked 12.5% following the DTCC report. Source: CoinGecko

LINK has gained over 130% in the last 12 months amid a broader uptick in the crypto market.

The DTCC report comes as wider enthusiasm for real-world asset tokenization from major traditional financial institutions.

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. The fund is referred to as the “digital liquidity fund” because it is digitized on the Ethereum blockchain and operates as an ERC-20 token called BUIDL.

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