Major Institutions Highlight Importance of Blockchain Interoperability in Asset Tokenization
New York, NY, June 6th, 2024, FinanceWire
Citi, Deutsche Bank, Mastercard, Northern Trust, and Centrifuge have collaborated with the Axelar Foundation and Metrika to produce a comprehensive report on achieving interoperability for tokenized assets across different blockchains and legacy systems.
The report, titled “Institutional Interoperability: How Financial Institutions Navigate a Multichain World,” was published today and focuses on increasing accessibility and liquidity for tokenized assets while ensuring flexibility, privacy, transparency, and scalability.
Tokenized assets are digital representations of real-world financial assets, such as real estate, currencies, and securities. A recent report by the Boston Consulting Group and ADDX predicts that these tokenized assets will be worth trillions of dollars within the next decade. All institutions involved in the report emphasized the need for interconnected network models that span multiple blockchains and traditional systems in order to fully realize the potential of tokenized assets.
Citi, Deutsche Bank, Mastercard, and Northern Trust provided insights into their projects related to asset tokenization, including their utilization of multiple blockchains and the challenges they have faced in achieving blockchain interoperability. Web3-native innovators Axelar Foundation, Centrifuge, and Metrika also contributed to the report.
The report serves as a roadmap for financial institutions navigating the complexities of tokenized assets and the various blockchains they operate on, while also meeting the demands of clients and regulatory requirements. It was authored by blockchain analyst Emily Parker, based on a framework developed by the Monetary Authority of Singapore’s Project Guardian in 2023.
The contributors to the report will be invited to discuss its findings at a panel event during the Point Zero Forum in Zurich from July 1-3. Readers can click here to download the report and request an invitation to the event.
“Tokenized assets are designed to be interoperable, bridging assets recorded on off-chain ledgers with on-chain representations,” said Georgios Vlachos, director of Axelar Foundation and co-founder of the Axelar protocol. “The question is not how we facilitate one connection, but how we enable potentially thousands of connections across different ledgers, in a secure, scalable, and open manner.”
“Multichain asset interoperability and servicing will likely become essential for securities service providers as their clients adopt different blockchains,” said Anand Rengarajan, managing director, global head of sales & head of securities services APAC, Corporate Bank, Deutsche Bank. “Asset servicers must know how to address and service interoperability between chains and traditional processes in a cost-effective and risk-managed way to enable sustainable growth.”
“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 need to actively participate in the blockchain ecosystem and connect different blockchains with tailored approaches.”
“Asset tokenization offers major advantages in access and liquidity, and 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 key to unlocking that potential,” said Nikos Andrikogiannopoulos, Founder and CEO of Metrika. “Effective risk management and ongoing surveillance ensure that these digital assets seamlessly integrate into existing financial systems, fostering confidence, accessibility, liquidity, and innovation.”
About Axelar
Axelar is a Web3 interoperability platform that provides the shortest path to scale on an open stack, connecting all blockchains. It is adopted by companies such as Uniswap, Microsoft, and various multichain startups, enabling applications to reach a broader user base. Axelar supports smart contracts on a cross-chain layer that is open, scalable, 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 established to support the growth and adoption of the Axelar network, a decentralized interoperability network that connects multiple blockchain ecosystems. Learn more at axelar.foundation.
About Centrifuge
Established in 2017, Centrifuge develops advanced technology for financial products. It offers asset managers a way 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 leading provider of blockchain risk management solutions, enabling proactive risk assessment and compliance across digital asset services. It offers strategic risk frameworks, regulatory compliance navigation, and ongoing monitoring and surveillance to protect operations from emerging risks.
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