Chainlink Labs, the company behind the Chainlink network and LINK token, has launched its Cross-Chain Interoperability Protocol (CCIP). This new protocol is designed to allow communication between traditional financial institutions and public and private blockchains.
On July 17th, Chainlink’s Chief Product Officer announced that CCIP is now live in an early access version on several major blockchain networks – Ethereum, Avalanche, Polygon, Arbitrum, and Optimism.
Starting July 20th, developers building on these platforms will be able to start testing out CCIP on test networks. The goal is to facilitate seamless interaction between different blockchains and traditional finance. This could enable new decentralized finance applications leveraging Chainlink’s oracle networks.
The Cross-Chain Interoperability Protocol (CCIP) from Chainlink enables enterprises to transfer data and value between public or private blockchains directly from their existing backend systems.
CCIP utilizes SWIFT’s global messaging network which connects over 11,000 banks worldwide for cross-border payments and settlements. In 2021, SWIFT settled approximately $1.8 quadrillion in transactions for its 11,000+ member banks.
By leveraging SWIFT’s established financial infrastructure, CCIP can facilitate seamless communication between blockchains and traditional finance. This allows enterprises to leverage blockchain technology without major backend upgrades. The goal is to make it simpler for organizations to adopt decentralized applications.
Chainlink CEO Sergey Nazarov has said the goal of the Cross-Chain Interoperability Protocol (CCIP) is to connect fragmented blockchain networks and traditional finance into a unified system, similar to how TCP/IP standardized the early internet.
Nazarov believes a solution enabling seamless transmission of value between networks will be critical for a blockchain-based economy.
Major financial institutions like BNY Mellon, BNP Paribas, Citi, ANZ Bank, Clearstream, Euroclear, and Lloyds are exploring using Chainlink’s interoperability protocol.
In addition to the initial 5 blockchains integrating CCIP, decentralized finance protocol Aave plans to implement it, while Synthetix is already live on the CCIP main net.
Following the CCIP announcement, the Chainlink token LINK rose nearly 10% to $7.27, outpacing gains across the broader crypto market. This suggests positive sentiment around Chainlink’s push into cross-chain interoperability.
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