Blockchain oracle provider Chainlink has announced a partnership with FIX connectivity solutions firm Rapid Addition to create a FIX-native adapter aimed at enhancing institutional digital asset trading.
This initiative leverages Chainlink’s Cross-Chain Interoperability Protocol (CCIP), designed to facilitate a variety of applications such as token transfers, gaming, and decentralized finance (DeFi).
Chainlink’s new development focuses on enabling banks and financial institutions to seamlessly communicate and interact with a diverse range of tokenized assets.
The organization identifies this venture as a promising market opportunity, potentially revolutionizing sectors like renewable energy, carbon credits, and real-world assets (RWAs) including real estate, infrastructure, and collectibles.
Vince Turcotte, Chainlink Labs’ business development lead for Asia Pacific, shared insights with Cointelegraph regarding the capabilities of this adapter.
Drawing parallels to Chainlink’s collaboration with the SWIFT banking system, Turcotte highlighted that financial entities can utilize the adapter to embed smart contracts with specific FIX tags and instructions.
He emphasized its utility in the post-trade process, stating, “We expect this will be particularly useful for the post-trade environment, as it will allow a single source of truth for trade allocations, which can be shared simultaneously and without duplication between asset managers, brokers, and custodians.”
Turcotte also noted that the adapter facilitates integration into existing legacy systems, enhancing the efficiency by reducing settlement errors and rejections.
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He explained that the synergy between Chainlink and FIX will allow traditional risk and execution platforms to effectively interact with emergent blockchain-based asset types.
Discussing the broader implications of this technological advancement, Turcotte projected that digitally native institutions are likely to lead in adopting this integration.
“We expect that digitally native institutions will be the early adopters of this integration.
“These institutions recognize the value of using the FIX protocol to engage with the broader TradFi ecosystem and the value of permanence and truth via blockchain,” he elaborated.
Turcotte also mentioned the cost benefits for asset managers and their clients, who could economize by using a unified, continuously updated platform for settlement instructions.
“Asset managers and their clients can save costs by having a single source of truth for settlement instructions available to all counterparties to a trade and constantly updated 24/7,” he added, pointing out the financial and operational efficiencies enabled by the new adapter.
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