Tokenising Real World Assets: ANZ Teams Up with Chainlink in Stablecoin Test Round

‘Big Four’ bank, Australia and New Zealand Banking Group Limited (ANZ) has entered into a partnership with the decentralized blockchain oracle network Chainlink. Built on Ethereum, Chainlink aims to connect ‘people, businesses, and data of today with the Web3 world of tomorrow,’ according to its website. ANZ plans to leverage Chainlink’s Cross-Chain Interoperability Protocol (CCIP) for implementing its stablecoin, A$DC.

As per ANZ, the bank is adopting a ‘test-and-learn approach,’ and has successfully executed a test payment mimicking the buying of a tokenised asset. This transaction utilized A$DC and an ‘ANZ-issued NZ-dollar-denominated stablecoin.’

Nigel Dobson, ANZ Banking Services Portfolio Lead commented: “This transaction involved technical integration of ANZ’s digital asset services technology stack with CCIP to realise cross-chain settlement of tokenised assets securely and efficiently.”

CCIP: Cross-Chain Interoperability Protocol

CCIP, based on Chainlink’s industry-standard oracle networks, enables efficient and secure cross-chain token transfers.  By providing audited token pool contracts, including features like rate limits, it allows token sponsors to maintain control, while facilitating seamless scaling of userbase and enhancing composability across multiple chains through a unified CCIP interface.

Sergey Nazaro, Co-founder of Chainlink, highlighted the role CCIP and Chainlink can play in cross-chain transactions:

As Australia and New Zealand Banking Group (ANZ), one the world’s largest global banks with over $1 trillion in total assets under management, demonstrates the use of CCIP for secure cross-chain stablecoin transactions, the role of Chainlink and CCIP as a standard for interbank… pic.twitter.com/qdehsUX4rQ

— Sergey Nazarov (@SergeyNazarov) September 14, 2023

Tokenised Assets Potential to Transform Banking

Dobson noted that the current fragmented state of on-chain financial operations, with assets spread across different blockchains, hampers their accessibility and liquidity, making it challenging for financial institutions to integrate them effectively.

He added: “While the technology solutions are still emerging, this collaboration is another important milestone for ANZ – showing the feasibility of technical interoperability, which can serve as a basis for further work on customer-led transactions.”

ANZ completed the first-ever Australian stablecoin payment with A$DC in March 2022, while NAB became the second local bank to make a transfer using a stablecoin. The AUDN stablecoin transaction in March 2023, was minted as an ERC-20 token in collaboration with Fireblocks and BlockFold.

Doubts Amidst Enthusiasm

The interest for stablecoins is in stark contrast to recent developments around Australian banks limiting customers’ exposure to crypto. CommBank (CBA) declared that it would restrict customers’ transfers to crypto exchanges to $10,000 per month and subject some transfers to 24-hour holds or even decline them altogether.

Westpac, NAB, and ANZ have also implemented measures to curb their customer’s interaction with crypto exchanges. Like CommBank, NAB has banned transfers to certain exchanges, without specifying which ones would be affected. Back in 2021, CBA announced plans to allow crypto trading through its investing app. The bank scrapped the plans shortly after referring to the crypto market’s volatility.

Source: CoinMarketCap

Meanwhile LINK, the native Chainlink token, is trading at US$6.15 ($9.56) as data from CoinMarketCap shows. This is a significant drop after LINK had rallied from a low US$5.11 ($7.94) in June to US$8.34 ($12.96) in July.