Chainlink, the decentralized oracle network built on Ethereum, has recently announced the launch of two new privacy features designed to help financial institutions safeguard data confidentiality when transacting between public and private blockchains.
In a blog post on Tuesday (October 22, 2024), Chainlink introduced the Blockchain Privacy Manager and CCIP Private Transaction, both aimed at addressing the lack of adequate privacy and security protocols for cross-blockchain transactions. This has been a significant barrier for financial institutions in adopting crypto, especially for complying with regulations such as the General Data Protection Regulation (GDPR) and the Markets in Financial Instruments Directive II (MiFID II) in Europe.
According to Chainlink, the Blockchain Privacy Manager allows financial institutions to integrate their private blockchain networks with existing systems, like corporate back-end infrastructure, while limiting the exposure of sensitive data on the blockchain. This solution is said to provide institutional crypto investors with easy access to crucial off-chain data, such as Proof of Reserve (PoR) and Net Asset Value (NAV), without compromising the confidentiality of their internal blockchain transactions.
Additionally, the CCIP Private Transaction feature leverages on-chain encryption/decryption protocols to enable more secure cross-chain communication while maintaining the full privacy of transaction details.
Pilot Test with ANZ Bank
Australia and New Zealand Banking Group (ANZ Bank) is reportedly one of the first institutions to trial Chainlink’s features for cross-chain Real World Assets (RWA) settlements. The bank has previously collaborated with Chainlink on other projects, including tokenization pilot programs.
Chainlink is one of the most proactive projects in advancing the RWA sector for institutions. In June 2024, the LINK token emerged as the most significant real-world asset (RWA) token, with developer activity reaching 428.83 in May, up about 45 points from 383.03 in April, according to Santiment.
As of this writing, LINK’s price has been fluctuating, currently standing at around $11.72. Daily trading volume has surged by 42%, reaching $321.98 million, according to CoinMarketCap data.
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