The Oracle platform Chainlink is now providing its technology to SBI Digital Markets (SBIDM), the digital asset arm of Japan’s major financial group SBI. The technology, called CCIP or Cross-Chain Interoperability Protocol, will support SBIDM’s digital asset platform to move its tokenized assets between public and private blockchains safely.
CCIP is Chainlink’s technology that allows for secure communication and transfer of data, tokens, and messages across blockchains.
Chainlink’s CCIP powers multiple platforms
Chainlink Lab’s CCIP has been adopted by several fintech platforms and networks. Recently, X Layer, an Ethereum Layer 2 network, chose the CCIP for cross-chain infrastructure. DeFi protocol Aave DAO uses CCIP. MetisDAO, another Layer 2 network on Ethereum, also selected CCIP as its canonical cross-chain infrastructure.
As the collaboration between Chainlink and SBIDM was announced, a social media user wrote: “Everything will be a node in the Chainlink cloud,” praising Chainlink that in the future, every blockchain and organization will depend on the platform’s nodes for transferring data, messages, and assets.
Why do companies move data across blockchains using CCIP?
As mentioned, there are public and private blockchains that serve different users with different purposes. Public blockchains like Bitcoin, Ethereum, and Polygon are permissionless, transparent, and are commonly used for crypto, DeFi, NFTs, and public records.
Meanwhile, private blockchains like RippleNet and Quorum are permissioned blockchains, and only invited entities like banks and institutions can join and validate transactions. These blockchains are used for tokenized assets, large enterprise data sharing, supply chains, bank settlements, and more.
Private blockchains are controlled and comply with strict regulations.
A bank may initially issue tokenized assets or a digital bond on a private blockchain. Later, it moves the assets to a public blockchain for trading or settlement with external investors. And here is where Chainlink’s CCIP is important. This technology helps to move assets across blockchains, ensuring security.
With hundreds of blockchain networks, each with its own unique standards and smart contracts, cross-chain communication is vital; otherwise, data and assets will get locked on a single blockchain. To avoid this, Chainlink’s CCIP acts as an interoperable technology to communicate between blockchains.
