Major Institutions Highlight the Importance of Blockchain Interoperability in Asset Tokenization
New York, NY, June 6th, 2024, FinanceWire
Citi, Deutsche Bank, Mastercard, Northern Trust, and Centrifuge have joined forces to contribute to a comprehensive report on achieving interoperability for tokenized assets across various blockchains and legacy systems. The report, titled “Institutional Interoperability: How Financial Institutions Navigate a Multichain World,” focuses on enhancing accessibility and liquidity for tokenized assets while maintaining privacy, transparency, and scalability.
Tokenized assets refer to on-chain representations of financial assets such as real estate, currencies, and securities. A recent report by the Boston Consulting Group and ADDX predicts that the value of tokenized assets could reach trillions of dollars within the next decade. All the institutions involved in the report highlight the importance of interconnected network models that incorporate multiple blockchains and traditional systems to fully realize this potential.
Citi, Deutsche Bank, Mastercard, and Northern Trust provide valuable insights in the report, discussing their respective projects in asset tokenization, their experiences with multiple blockchains, and the challenges they face in achieving blockchain interoperability. Web3-native innovators Axelar Foundation, Centrifuge, and Metrika also contribute to the report.
The report serves as a roadmap for financial institutions navigating the complex landscape of tokenized assets and the multitude of blockchains available, while also meeting the requirements imposed by clients and regulations. It was authored by blockchain analyst Emily Parker, based on the framework established by the Monetary Authority of Singapore’s Project Guardian in 2023.
The contributors to the report will have the opportunity to discuss its findings at a panel event during the Point Zero Forum in Zurich from July 1-3. Readers can download the report and request an invitation to the event by clicking here.
“Tokenized assets are inherently interoperable, bridging assets recorded on off-chain ledgers with on-chain representations,” said Georgios Vlachos, director of Axelar Foundation and co-founder of Axelar protocol. “The question is not how to facilitate a single connection but how to facilitate potentially thousands of connections across on-chain and off-chain ledgers in a secure, scalable, and open manner.”
“Multichain asset interoperability and servicing will likely become a necessity for securities service providers as clients adopt different chains,” said Anand Rengarajan, managing director, global head of sales & head of securities services APAC, Corporate Bank, Deutsche Bank. “Asset servicers must understand how to address and manage interoperability between chains and traditional processes to enable sustainable growth that multiple chains can amplify.”
“Northern Trust is preparing for significant growth in the tokenization of its assets under custody,” said Alvin Chia, head of digital assets innovation for Asia Pacific at Northern Trust. “To provide the best services to our clients, we must actively participate in the blockchain ecosystem and establish connections with multiple blockchains using tailored approaches.”
“Asset tokenization offers significant advantages in terms of access and liquidity. With a modular, multichain architecture, it can also improve visibility and on-chain utility,” said Bhaji Illuminati, CMO of Centrifuge. “This is Centrifuge’s approach to enable flexibility and scalability in the rapidly evolving RWA ecosystem.”
“Tokenized assets have transformative potential for financial institutions, and interoperability, along with risk management, is crucial to unlocking that potential,” said Nikos Andrikogiannopoulos, Founder and CEO of Metrika. “Effective risk management and ongoing surveillance ensure seamless integration of digital assets into existing financial systems, fostering confidence, accessibility, liquidity, and innovation.”
About Axelar:
Axelar is the leading Web3 interoperability platform, providing a scalable and secure solution to connect all blockchains. Notable adopters include Uniswap, Microsoft, and numerous multichain startups, enabling applications to reach a larger user base than any other Web3 environment. Axelar supports smart contracts on a cross-chain layer that is open and secure. Backed by Binance, Coinbase, Dragonfly, Galaxy, and Polychain.
To learn more, visit axelar.network.
About Axelar Foundation:
Axelar Foundation is a nonprofit organization dedicated to supporting the growth and adoption of the Axelar network, a decentralized interoperability network that connects multiple blockchain ecosystems. Learn more at axelar.foundation.
About Centrifuge:
Founded in 2017, Centrifuge develops advanced technology for financial products. Centrifuge offers asset managers a platform to tokenize, manage, and distribute their funds on-chain, providing investors with better access to a diversified portfolio of high-quality tokenized assets.
About Metrika:
Metrika is the industry leader in blockchain risk management, offering proactive risk assessment and compliance solutions for digital asset services. Implement strategic risk frameworks, navigate regulatory compliance, and protect operations from emerging risks through ongoing monitoring and surveillance. Learn more at metrika.co.
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