Sergey Nazarov, creator of Chainlink (LINK), says recent experiments have proved that banks and traditional financial institutions can now connect to hundreds of different blockchains easily.
In a new interview with Jill Malandrino, a reporter for Nasdaq, Nazarov touches on a recent Chainlink-based experiment conducted by SWIFT and a group of banking giants including Citi, BNY Mellon, BNP Paribas and others.
SWIFT announced in June that it was using Chainlink to test interoperability measures with over a dozen institutions. The giant said institutions that want to interact with tokenized assets face the problem of blockchains not being interoperable, with each having its own functionality or liquidity, thus creating friction and overhead for the firms.
According to Nazarov, the tests have resulted in three main achievements.
“It achieved three very important things. The first thing is that it proved that you can use existing bank infrastructure like SWIFT and SWIFT messages to easily connect to hundreds of chains with a very minimal amount of effort from banks, which means that banks can go on to hundreds of chains very efficiently.
The second thing that it proved is that multiple chains, both public and private, can be connected efficiently and reliably for those banks to transact with each other, and the final thing that it proved is that those private chains can transact with public chains effectively, meaning that value from the private bank industry can flow into the public blockchain industry which I think will have a very important impact on both the banking world and the public blockchain world.”
Nazarov says that in order for banks to utilize blockchain tech, they have to connect to it using their existing infrastructure which they have placed so much investment into. He says Chainlink allows banks to integrate their systems into the crypto space, bringing their value onto public blockchains.
“Banks have made a very large investment in the security of their existing infrastructure. And they’ve trained a lot of people to use that infrastructure which is very different than startups that have begun their entire journey on the blockchain so they have no existing systems that they have to keep secure or have people use.
So banks rely on these systems to a very large degree and there’s huge amounts of value on them, they’re not getting rid of them. So really, the only way that banks are going to be able to use blockchains efficiently is from their existing infrastructure… once you put a lot of value into a system, you’re very unlikely to shut it down.”Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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