DTCC, Chainlink Conclude Pilot to Accelerate Fund Tokenisation with Participation from JPMorgan, Templeton, and BNY Mellon

The Depository Trust and Clearing Corporation (DTCC), the world’s largest securities settlement system, has concluded a pilot initiative with blockchain oracle Chainlink (LINK) and several major U.S. financial institutions. The aim was to accelerate the tokenisation of funds, as per a report released by DTCC on Thursday.

The project, named Smart NAV, sought to establish a standardised procedure for bringing and distributing net asset value (NAV) data of funds across various private or public blockchains using Chainlink’s interoperability protocol CCIP. Market participants included American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street, and U.S. Bank.

Upon completing the pilot, DTCC noted that delivering structured data on-chain and establishing standard roles and processes enabled foundational data to be incorporated into various on-chain use cases, including tokenised funds and ‘bulk consumer’ smart contracts, which hold data for multiple funds.

These functionalities could facilitate future industry investigations and drive “numerous downstream use cases”, such as brokerage applications, enhanced automated data distribution, and simplified access to historical fund data, the report highlighted.

The pilot aided in establishing improved automated data handling, minimal disruption to established market practices for traditional financial institutions, enabled clients to retrieve historical data without manual record-keeping, and offered expanded API solutions for pricing data, according to the DTCC’s report.

The pilot occurred amidst the rising trend of tokenising real-world assets (RWAs) like bonds, funds, and other conventional investments, which has emerged as a prominent application of blockchain technology. Numerous financial giants such as BlackRock, Citi, and HSBC have entered this arena, seeking advantages such as operational efficiencies, faster settlements, and enhanced transparency compared to conventional financial systems.

Chainlink has gained as much as 24% since Wednesday.