US banks successfully complete pilot for tokenization of fund data with DTCC and Chainlink

The Depository Trust and Clearing Corporation (DTCC), the world’s largest settlement system, and blockchain oracle Chainlink have successfully completed a pilot program with major US banking firms to enhance the tokenization of traditional finance funds. The program, called Smart NAV Pilot, aimed to standardize the provision of net asset value (NAV) data for funds across different blockchains using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), as stated in a DTCC report on May 16. The pilot demonstrated that by delivering structured data on-chain and establishing standard roles and processes, foundational data could be integrated into various on-chain applications, such as tokenized funds and smart contracts holding data for multiple funds. These capabilities could facilitate future industry exploration and support multiple downstream use cases, including brokerage applications, automated data dissemination, and easier access to historical fund data. The pilot also improved automated data management, minimized disruption to existing market practices for traditional financial institutions, enabled clients to retrieve historical data without manual record-keeping, and provided broader application programming interface (API) solutions for price data. Participating US banking firms in the pilot included American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street, and U.S. Bank. Following the release of the DTCC report, the price of Chainlink’s token (LINK) surged by 12.5%, according to CoinGecko. LINK has experienced a 130% gain in the past 12 months amidst a broader upward trend in the cryptocurrency market. The DTCC report coincides with growing interest in the tokenization of real-world assets by major traditional financial institutions. For instance, on March 19, BlackRock launched BUIDL, a tokenized money market fund on the Ethereum network, which offers native US dollar yields. The fund allows investors to purchase tokens representing shares in the fund, which invests in assets like US Treasury bills. It operates as an ERC-20 token called BUIDL and is referred to as the “digital liquidity fund” due to its digitization on the Ethereum blockchain.