Chainlink Unveils Privacy Solution for Institutional Cross-Chain Transactions, Partners with ANZ Bank

TLDR:

• Chainlink launches CCIP Private Transactions with new Blockchain Privacy Manager
• ANZ bank is first major institution to pilot the technology
• Technology enables private cross-chain transactions while maintaining regulatory compliance
• Solution addresses key privacy barriers that have limited institutional blockchain adoption
• LINK token surged to $12.16 following the announcement, highest since late September

Chainlink has unveiled a new privacy-preserving technology called CCIP Private Transactions, marking a big development in institutional blockchain adoption. The announcement on October 22, 2024, revealed that Australia and New Zealand Banking Group (ANZ) will be among the first financial institutions to implement the technology.

The new capability is powered by Chainlink’s Blockchain Privacy Manager and addresses long-standing privacy concerns that have prevented many financial institutions from fully engaging with blockchain technology.

The solution enables banks and other institutions to maintain data confidentiality while complying with regulatory requirements such as GDPR and MiFID II.

ANZ’s pilot program will focus on cross-chain settlement of tokenized real-world assets under the Monetary Authority of Singapore’s Project Guardian initiative. This implementation represents the first major banking institution to adopt the technology for practical use.

The Blockchain Privacy Manager allows institutions to connect private chains to both public and private blockchains using the Chainlink CCIP network. This connectivity is achieved while maintaining control over what information is revealed during transactions.

A key feature of the system is its novel onchain encryption and decryption protocol. This allows institutional cross-chain transactions while keeping sensitive details private, including transaction data, token amounts, and counterparty information.

The technology gives users the ability to define specific privacy conditions. This means institutions can keep onchain data private from third parties while still allowing authorized parties and compliance officers to access necessary information.

Following the announcement, Chainlink’s LINK token experienced a price increase. The token reached $12.16, its highest point since late September, before settling at $12.01. This represents a 6% increase for the month and a 4% rise over the previous week.

The market responded positively to the news, with LINK maintaining its position among the top 15 digital assets. The token’s market capitalization stands at approximately $7.5 billion.

Sergey Nazarov, Chainlink’s co-founder, emphasized the importance of privacy in institutional transactions. He noted that previous limitations in blockchain privacy had restricted industry growth.

ANZ’s Banking Services Lead, Nigel Dobson, expressed optimism about the technology’s potential to accelerate institutional blockchain adoption. He highlighted the importance of addressing privacy challenges in blockchain transactions.

The partnership builds on previous collaboration between ANZ and Chainlink, where they demonstrated cross-chain settlement of tokenized assets using Chainlink CCIP.

Chainlink’s track record includes facilitating over $16 trillion in transaction value and delivering more than 16 billion verified messages across the blockchain ecosystem.

The company has also introduced a Sandbox for DECO, a privacy-preserving data verification system. This system utilizes zero-knowledge proofs and existing web infrastructure to ensure participant privacy.

DECO is currently in testing phase, with plans for public access in the future. This development represents another step in Chainlink’s efforts to enhance privacy in blockchain transactions.

The technology addresses specific compliance requirements that have previously hindered financial institutions from interacting across blockchain environments. These include the need for complete privacy in private chain to private chain transactions.

The solution also limits data exposure for transactions between private and public chains, addressing a crucial concern for institutional users.

Major market infrastructure providers and institutional banks, including Swift and Fidelity International, have previously worked with Chainlink to demonstrate blockchain interaction capabilities.