Major Australian Bank Pioneers Cross-Chain Tokenized Asset Settlement with Avalanche and Chainlink
Leading Australian bank ANZ has unveiled a collaboration with Avalanche and Chainlink to explore cross-chain settlement of tokenized assets, as highlighted in a post shared by Avalanche. This initiative aims to connect the Avalanche network with Ethereum, enabling the seamless circulation and settlement of tokenized assets globally.
Besides, financial institutions are increasingly recognizing blockchain, smart contracts, and tokenization as key drivers for modernizing capital markets infrastructure. Additionally, a SWIFT report lately, highlighted this trend, indicating that 97% of institutional investors believe tokenization has the potential to revolutionize the asset management industry.
What you'll learn 👉
ANZ’s Cross-Chain Asset Settlement Breakthrough
ANZ, a major bank serving over 8.5 million customers across nearly 30 markets, has been exploring the possibilities of on-chain digital assets. Moreover, in a joint effort with Chainlink Labs, ANZ demonstrated how clients could access, trade, and seamlessly settle tokenized assets across networks in different currencies through a process called Delivery vs. Payment (DvP).
DvP is a standard risk-management practice in securities settlement, requiring payment and delivery to occur simultaneously. Blockchain technology and smart contracts offer an opportunity to modernize legacy DvP processes by tokenizing assets and payments on the same infrastructure, enabling atomic, non-intermediated DvP settlement.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP)
“Chainlink CCIP played a key role in abstracting away the blockchain complexity of moving tokenized assets across different chains and ensuring atomic cross-chain DvP,” said Lee Ross, Technology Domain Lead at ANZ.
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Show more +The Simulated Transaction Workflow
In this initiative, ANZ simulated the purchase of tokenized assets on Ethereum denominated in one stablecoin, with transaction initiation and settlement occurring on Avalanche in another stablecoin.
Specifically, an ANZ customer used the bank’s Digital Asset Services (DAS) portal to purchase tokenized ANZ-issued New Zealand dollar stablecoins (NZ$DC) on Avalanche, then purchased tokenized Australian nature-based assets issued as NFTs denominated in tokenized ANZ-issued Australian dollar stablecoins (A$DC) on Ethereum.
Furthermore, ANZ facilitated the FX conversion between the two currencies. CCIP provided the backend infrastructure for ANZ to send data and transfer tokens between Ethereum and Avalanche, enabling a seamless frontend user experience.
Leveraging Avalanche Evergreen Subnet
For this project, ANZ leveraged its own Avalanche Evergreen Subnet for its EVM compatibility, permissioning, and customized gas token, among other features. “Avalanche’s Evergreen Subnets have allowed ANZ to join the list of institutions exploring new use cases and business models while leveraging customizable networks like Avalanche,” said Anurag Soin, Product Lead Digital Added Services at ANZ.
As the collaboration progresses, ANZ looks forward to continuing to test how blockchain, smart contracts, and tokenization can improve the rails of the global financial system, potentially unlocking new business models and enhancing capital markets infrastructure.
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