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On the web, web3 development and the merger between the crypto universe and traditional finance is at the center of major debates. Guest on TradeTalks, the co-founder of Chainlink explains the challenges banks face in adopting blockchain and proposes a solution. It was September 18, 2023 on the Nasdaq TradeTalks show. Back to the key points of this interview.
Lack of flexibility of existing banking infrastructure
Last June, powerful financial institutions around the world came together to discuss the issue of blockchain interoperability and its limits. This initiative by SWIFT and Chainlink had indeed made it possible to appreciate the enthusiasm of traditional finance players to maximize the potential offered by the crypto universe.
However, according to the co-founder of Chainlink, traditional banks will have a hard time adopting blockchain and crypto technologies permanently.
Sergey Nazarov explains in his interview that the integration of blockchain into the banking sector is limited by its relative incompatibility with the configuration of existing banking infrastructure.
However, he notes that banks have made enormous investments in existing infrastructure and staff training. The adoption of blockchain technology will require a complete renovation of this infrastructure and accelerate the obsolescence of staff skills.
SWIFT network infrastructure could be the solution for blockchain adoption
To accelerate the merger between the crypto universe and traditional finance, the co-founder of Chainlink drew attention to the potential of the SWIFT network.
He believes that SWIFT’s infrastructure already enables very smooth interaction between banks and facilitates international payments and settlements. SWIFT therefore offers the adequate infrastructure to connect banks to the blockchain. The network also enjoys the trust of major players in the banking sector.
To prove his point, the co-founder of Chainlink recalled the recent experiment carried out with ANZ, the 4e Australia’s largest bank. The cash-free ANZ actually tested its first use case of real-world asset tokenization a few days ago.
In reality, using its stablecoin and the infrastructures of SWIFT and Chainlink, the bank carried out a first test of purchasing secure tokenized real assets. The success of this operation revealed that it is possible to bypass existing banking infrastructure to connect financial institutions to the blockchain. According to Sergey Nazarov, this progress will help boost the market for interbank transactions and that of cross-border financial operations.
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A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this revolution in progress.
The comments and opinions expressed in this article are those of the author alone, and should not be considered investment advice. Do your own research before making any investment decisions.