Real-world asset tokenization is said to be the next big frontier for the blockchain industry, and Chainlink continues to expand global partnerships with a focus on real-world asset tokenization and cross-chain transactions.
On May 21, the world's largest blockchain oracle network announced that it is expanding its partnership with Arta TechFin, a Hong Kong-based asset management and financial services company, to bring real-world assets onto the chain.
Eddie Lau, CEO of Arta Techfin, said the partnership “aims to address market scarcity for a comprehensive solution that addresses pain points from initial off-chain creation and secondary trading to enhancing product safety.”
According to Chainlink, real-world assets represent up to $867 trillion globally. Tokenization would increase the velocity of money by opening previously illiquid assets, such as collectibles and real estate, to electronically tradable markets.
Real estate, in particular, is notorious for being highly illiquid and incredibly difficult to deal with. Assuming there is no cash buyer, a typical real estate transaction in the United States takes between 30 and 60 days to close.
Once the deal closes, reselling the home or exploiting the equity subjects the owner to complex and arcane processes that can also take months to complete.
At the heart of bringing real-world assets on-chain are Chainlink's real-time price feeds and the CCIP Interoperability Protocol, which allows the oracle network to interact with other blockchains and transfer assets between chains.
In 2023, SWIFT, the interbank messaging protocol, announced that it was collaborating with Chainlink to test the transfer of value between blockchain protocols.
Related: Chainlink joins Rapid Addition in building an enterprise blockchain adapter
Recently, Chainlink conducted a similar pilot program with the Depository Trust & Clearing Corporation (DTCC) and several banking giants such as BNY Mellon, JP Morgan, and Edward Jones.
The planned goal of the pilot was to bring in funding data from on-chain banks.
However, Chainlink is not the only player in the industry focused on bringing real-world assets to the blockchain.
Companies like Ripple Labs continue to sign partnership deals with the purported goal of tokenizing real assets such as real estate, stocks, mortgages, and bonds.
According to CEO Brad Garlinghouse, Ripple has entered into partnerships with JPMorgan, Santander, and IBM to tokenize assets on its blockchain ledger, a primary goal of the company.
