Breaking: Swift, Chainlink, and Major Banks Achieve Multi-Blockchain Token Transfer

Swift, the global financial messaging service, announced on August 31, 2023, that it has successfully conducted a series of experiments to facilitate the transfer of tokenized assets across multiple blockchains. Collaborating with major financial institutions and Chainlink ($LINK), a Web3 services platform, Swift aims to solve the interoperability challenges that have been a barrier to the growth of tokenized asset markets.

Major banks involved are: Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, SIX Digital Exchange (SDX), The Depository Trust & Clearing Corporation (DTCC).

Key Findings

Swift’s experiments revealed that its existing infrastructure could serve as a “single point of entry for financial institutions moving tokenized assets while leveraging existing secure infrastructure.” The cooperative’s efforts are part of a broader strategy to maintain secure, global interoperability in a fragmented financial ecosystem.

Tom Zschach, Chief Innovation Officer at Swift, stated, “Interoperability is at the heart of everything we are doing at Swift to facilitate the seamless flow of value across the world […] 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.”

The Challenge of Interoperability

Tokenization is still in its early stages, but 97% of institutional investors believe it will revolutionize asset management. One of the main challenges is the lack of interoperability between different blockchains where tokenized assets are managed. Financial institutions currently have to build connections to each platform individually, leading to “significant operational challenges and cost.”

Technical Insights

Swift collaborated with financial institutions such as ANZ, BNP Paribas, and BNY Mellon, among others. Chainlink was used to securely connect the Swift network to the Ethereum Sepolia network. The experiments involved transfers of simulated tokenized assets between wallets on the same public Distributed Ledger Technology network, between two wallets on different public blockchains, and between a public and private blockchain network.

Future Prospects

Swift will continue to work with the financial community to identify the most compelling use cases for tokenized asset adoption. The most promising avenue, in the near term, appears to be in the secondary trading of non-listed assets and private markets.

Implications

The experiments signify a step forward in solving the interoperability problem that has been a bottleneck for the broader adoption of tokenized assets. By providing a single point of entry, Swift could potentially lower operational challenges and costs for financial institutions.

Conclusion

Swift’s experiments mark a significant milestone in the quest for interoperability in the tokenized asset landscape. While the technology is still in its infancy, Swift’s efforts could pave the way for more efficient and cost-effective management of digital assets, thereby accelerating their adoption in mainstream finance.

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LINE to Offer BTC, ETH for Payment Options and Introduce token in March

Messenger app LINE is considering adding cryptocurrencies to its payment options and officially launching its native LINK token (LN) in March.

Per its announcement, users can use “the LINK at some LINE Pay online merchants during a trial period from March to December 2022 in Japan.”

Although users can choose both LN for payment on the Line pay software, the token and Chainlink (LINK) are two different cryptocurrencies.

The LN was officially launched in 2018 based on its own blockchain network, LINE Blockchain. Users can pay commissions through LINK or LINE Pay accounts or bank accounts when trading crypto assets.

According to Coinmarketcap, LN was trading at $144.80 during the intraday, up over 20% in the past 7 days.

In August 2020, LINE launched a new blockchain digital wallet that can be used to manage various crypto assets.

The digital wallet, dubbed BITMAX, can be used to combine digital tokens coming from different blockchain services into a single wallet.

The company said it will connect the link token to LINE Pay as a payment solution, test the token’s in reality, and increase the convenience and number of payment options for users.

LINE Pay Corporation is the operator of FinTech services for the LINE Pay digital wallet and LINE messaging app.

As reported by Blockchain.News on October 20,  LINE was developing a platform to aid Asian central banks in their pursuit of central bank digital currencies (CBDC).

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Japan-based messaging app will offer trial run of native token starting in March

Users of Japanese messaging giant LINE will soon be able to use the app’s native token for payments at select online merchants in a limited trial.

In a Tuesday announcement, the LINE Corporation said that starting on March 16, users would have the option of paying with native LINK token (LN) — not to be confused with Chainlink (LINK) — at any of LINE Pay’s online merchants. The trial period, which will run until Dec. 26, is aimed at testing real-life use cases for the tokens in addition to increasing the convenience and number of payment options for users.

Source: Mikhail Nilov, Pexels

LINE Pay said it was considering adding other cryptocurrencies including Bitcoin (BTC) and Ether (ETH) to its payments options in the future, in addition to strengthening its partnerships with blockchain firms. Data from Statista shows there were 86 million monthly active LINE users as of the third quarter of 2020 — more than 68% of the country’s population of 126 million.

Launched in August 2018, the LN token is currently trading at $142.78, having risen by roughly 22% in the last 7 days. The token has been available for trading on crypto exchange Bitmax following an August 2020 agreement. As of the end of 2021, there were 30 crypto exchange businesses operating in Japan that had been approved by the country’s Financial Services Agency.

Related: Japan’s financial regulators may propose legislation in 2022 restricting stablecoin issuance

A consortium of Japan-based financial institutions and major corporations announced in November that they planned to trial and launch a yen-based digital currency in fiscal 2022. The country’s central bank, the Bank of Japan, is still in the research phase of developing a digital yen, expecting to complete its first trials by March.