Chainlink has launched CCIP 2.0, a new version of its standard for moving tokenised assets between blockchains. Banks and issuers can now add their own verification and customer checks, and choose how fast transfers settle.
Photo: Sergey Nazarov, Chainlink (Chainlink Today)
Tokenised shares, funds, commodities and currencies are currently spread across many different blockchains, both public and private. For a bank or asset manager that wants to make a tokenised fund available in several markets, the problem is that the assets cannot easily be moved from one blockchain to another.
CCIP, short for Cross-Chain Interoperability Protocol, is Chainlink's standard for moving data and value between blockchains. The new version is now live and open to all institutions and issuers of digital assets. The changes centre on three things banks have asked for: control, regulatory compliance and speed.
Until now, every transfer through CCIP has been approved by a committee of 16 independent operators, who must agree before the transaction goes through. With CCIP 2.0, a bank or issuer can also run its own verification. Both the committee and the bank's own verifier must then sign before the transfer is executed on the destination blockchain.
The issuer decides when the extra check applies, for example requiring separate approval for all transfers above US$1 million. Those who do not want to run verification themselves can buy it as a service. Infosys, Nethermind and Further Asset Management are among the companies offering this to clients, and third parties can charge their own fees on top of CCIP's base price.
According to Chainlink, most bridges between blockchains today cannot enforce know-your-customer checks, anti-money laundering rules or sanctions screening. That makes it difficult for regulated issuers to distribute tokenised assets widely.
In CCIP 2.0, the standard is connected to Chainlink's own compliance tool. The issuer can set lists of who may and may not receive the assets, sanctions screening, transfer limits and a requirement that only approved senders and recipients can move assets between blockchains. The rules are set up once and then apply to every transfer.
By default, CCIP waits until a transaction is final on the source blockchain, meaning it can no longer be reversed. How long that takes varies from one blockchain to another.
Issuers can now choose to let smaller, frequent transfers through before they are final, while larger settlements still wait. The issuer decides how much value can take the fast route, and can charge extra for the risk. Chainlink also says CCIP will support a new rule for faster confirmations on Ethereum once it launches, bringing confirmation down to seconds. Lending platform Aave and asset manager Maple are among those that have adopted the faster option.
According to Chainlink, CCIP currently secures more than US$84 billion in tokenised assets that can be moved between blockchains. Over the past four months, more than US$15 billion has migrated to the standard, including BitGo's Wrapped Bitcoin at more than US$7.4 billion and Coinbase's cbBTC at more than US$6.1 billion.
Launch partners include ANZ Bank, Fidelity International, Deutsche Börse-owned Crypto Finance, Sygnum, Taurus, SBI Digital Markets, Amazon Web Services and Google Cloud.
Chainlink's main pitch to banks is cost and neutrality. The company estimates that building equivalent infrastructure in-house takes more than six months and costs a six-figure dollar sum per blockchain. Chainlink also argues that banks are reluctant to move assets through infrastructure owned by a competitor.
With CCIP, banks instead set up security, compliance and operations once, and then use the same setup on every blockchain they adopt.
Sources: Chainlink
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