Chainlink, the “standard” for onchain finance, Kinexys by J.P. Morgan, the financial services firm’s blockchain business unit, and Ondo Finance, the real-world asset tokenization specialist, announced the completion of a cross-chain Delivery versus Payment (DvP) test transaction.
The transaction utilized blockchain deposit accounts “on Kinexys Digital Payments’ permissioned network for payment settlement,”
Ondo Chain’s Layer 1 blockchain purpose-built to “scale the tokenization of real-world assets, Ondo’s tokenized U.S. Treasuries Fund (OUSG), and Chainlink’s cross-chain orchestration infrastructure.”
This milestone powered by Chainlink demonstrates a scalable “approach to cross-chain, atomic settlement of a tokenized asset between Kinexys Digital Payments’ permissioned blockchain network and the Ondo Chain.”
This is the debut transaction on the Ondo Chain testnet, a Layer 1 purpose-built “for institutional-grade real-world assets, combining the openness of public blockchains with the security features of permissioned chains.”
This marks an expansion of “the Kinexys platform’s settlement integrations to date beyond fully private chains.”
The transaction involved the “exchange of Ondo Chain’s Short-Term U.S. Government Treasuries Fund (OUSG) as the asset leg with Kinexys Digital Payments serving as the payment leg.”
The DvP solution that orchestrated the movement of asset and payment was powered end-to-end by the Chainlink Runtime Environment (CRE)—an offchain computing environment “for coordinating activity across blockchains and existing systems, which leveraged an integration with Kinexys Digital Payments’ synchronized settlement workflow.”
CRE facilitated a settlement between Kinexys Digital Payments and Ondo Chain’s testnet environment, while “preserving institutional-grade security, compliance, and scalability standards.”
DvP transactions are difficult to “execute in traditional finance due to fragmented systems and manual workflows, leading to costly settlement delays and increased counterparty risk.”
In the past decade, it is estimated “that payment and settlement failures have cost market participants at least $914B+.”
DvP issues are further compounded “in cross-border transactions by complex regulatory, geographical, and currency limitations.”
By leveraging blockchain on the asset and payment legs of the transaction and Chainlink’s oracle infrastructure “for orchestration of atomic DvP settlement, assets and payments can be exchanged simultaneously cross-chain, reducing counterparty and settlement risk.”
Automated workflows at all points of the transaction “enhance operational efficiency, while near real-time finality supported by the asset and payment infrastructures improves liquidity management.”
Additionally, blockchain-based settlement reduces intermediary costs and increases transparency “through immutable, verifiable transaction records that offer real-time visibility into asset movements.”
