SBI Group, one of Japan’s financial conglomerates with the USD equivalent of over $200 billion in total assets, and Chainlink, the so-called “industry-standard” oracle platform, announced a partnership focused on accelerating blockchain and digital asset adoption across global markets.
Japan’s financial market and evolving digital asset ecosystem aim to provide an suitable environment to “launch and validate initial use cases.”
This collaboration combines SBI’s market expertise with Chainlink’s infrastructure for data and interoperability, used “by financial institutions and DeFi applications worldwide.”
As a survey from SBI Digital Asset Holdings, the digital asset arm of SBI, covering over “50 financial institutions revealed, exposure to and demand for digital assets have increased significantly over the past 12 months.”
76% of respondents intend to invest in tokenized securities to “benefit from lower costs, shorter settlement periods, among other key benefits.”
However, the lack of institutional-grade “market infrastructure for digital assets was cited as the primary barrier to wider market adoption.”
As blockchains underpin digital assets, “an institutional-grade blockchain interoperability solution is pivotal to fostering adoption and developing an end-to-end digital asset ecosystem.”
SBI and Chainlink’s strategic partnership focuses on “a number of key use cases for financial institutions in Japan and the APAC region.”
This includes enabling cross-chain tokenized real-world assets, such as real estate and bonds, “utilising Chainlink’s Cross-Chain Interoperability Protocol (CCIP), a protocol that enables secure transactions across any chains while ensuring compliance and privacy.”
CCIP and Chainlink SmartData will also be “leveraged to bring net asset value (NAV) data onchain for tokenized funds, which helps to unlock liquidity and improve operational efficiency.”
The partnership will also focus on facilitating payment versus payment (PvP) for FX and cross-border transactions “using Chainlink CCIP, whilst also leveraging Chainlink Proof of Reserve to provide transparent onchain verifications of the reserves backing stablecoins.”
The SBI team and Chainlink have reportedly entered collaborations in the past.
Chainlink, UBS Asset Management, and SBI Digital Markets (an SBI subsidiary in Singapore) previously “completed an initiative for automated fund administration and transfer agency using smart contracts under the Monetary Authority of Singapore’s (MAS) Project Guardian.”
As covered, Chainlink says that it is the so-called “industry-standard oracle platform bringing the capital markets onchain and powering the majority of decentralized finance (DeFi).”
The Chainlink stack provides the essential “data, interoperability, compliance, and privacy standards needed to power advanced blockchain use cases for institutional tokenized assets, lending, payments, stablecoins.”
Since inventing decentralized oracle networks, Chainlink has reportedly enabled “tens of trillions in transaction value and now secures the vast majority of DeFi.”
Many of the world’s financial services institutions have also “adopted Chainlink’s standards and infrastructure, including Swift, Euroclear, Mastercard, Fidelity International, UBS, ANZ, and top protocols such as Aave, GMX, Lido, and many others.”
Chainlink leverages a fee model “where offchain and onchain revenue from enterprise adoption is converted to LINK tokens and stored in a strategic Chainlink Reserve.”
As noted in the update, The SBI Group is a financial conglomerate based in Japan.
The SBI Group’s core businesses “include Financial Services Business, Asset Management Business, Investment Business, Crypto asset business and Next Gen Business (new and innovative ventures that go ‘beyond finance’).”
Like many other businesses, SBI claims that it has “been at the forefront of digital asset innovation in Japan and globally, establishing an expansive ‘digital financial ecosystem.'”
This ecosystem extends beyond traditional finance, “encompassing a wide range of services, ventures and investments related to crypto-assets, blockchain, and Web3 technologies.”
Key digital asset related companies reportedly include “SBI VC Trade, B2C2, ODX. Key investments in the ecosystem include Ripple, Digital Asset, R3, Sygnum bank among others.”