Chainlink launches cross-chain protocol bridging blockchain to TradFi
The development firm behind the Chainlink protocol and its native
token has gone live with its cross-chain protocol, aimed at providing interoperability between traditional financial firms and both public and private blockchains.
In a July 17 post on the Chainlink blog, Chainlink Labs’ Chief Product Officer Kemal El Moujahid announced that its Cross-Chain Interoperability Protocol (CCIP) has launched under early access on Ethereum, Avalanche, Polygon, Arbitrum, and Optimism.
Developers on these platforms will have access to CCIP on their respective testnets on July 20.
— Chainlink (@chainlink) July 17, 2023
CCIP is an interoperability protocol that allows enterprises to transfer data and value between public or private blockchain environments directly from their backend systems.
Chainlink’s interoperability solution uses Swift’s messaging infrastructure, which is used by over 11,000 banks around the world to facilitate international payments and settlement.
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In 2021 alone, the network settled about $1.8 quadrillion in transactions from over 11,000 member banks, to the UnIted States Financial Crimes Enforcement Network.
A diagram depicting how financial institutions can use CCIP to transact on-chain.Source: Chainlink.
Chainlink co-founder and CEO Sergey Nazarov explained on July 17 that CCIP aims to create a bridge the on-chain and off-chain worlds:
“Just like key standards such as TCP/IP remade a fragmented early internet into the single global internet we all know and use today, we are making CCIP to connect the fragmented public blockchain landscape and the growing bank chain ecosystem into a single Internet of Contracts.”
An interoperability solution that can seamlessly transmit value between networks will be a critical building block for a blockchain-powered society, Nazarov added.
Among the other financial institutions exploring the use of Chainlink’s interoperability solution includes BNY Mellon, BNP Paribas, Citi, Australia and New Zealand Banking Group, Clearstream, Euroclear and Lloyds Banking Group, according to Chainlink.
In addition to the five blockchains integrating CCIP, decentralized finance protocol AAVE is set to implement the interoperability solution, while decentralized derivatives platform Synthetix is already live on the CCIP mainnet.
The price of the Chainlink token, LINK, increased 9.7% to $7.27 over the past eight hours while the rest of the market remained relatively neutral, according to CoinGecko.
The LINK token surged 7.5% following the news of CCIP’s launch on mainnet. Source: CoinGecko
Cointelegraph reached out to Chainlink Labs for comment but did not recieve an immediate response.