30s Summary

Chainlink has partnered with international banking infrastructure firm Swift with the aim of using blockchain technology to improve payments processes. The plan is for Chainlink’s system to build a link between traditional banking practices, which involve Swift confirmations of transactions and settlements, and blockchain technology. Chainlink’s benefits, including a Blockchain Privacy Manager (BPM), were clearly outlined during a conference held by Swift. As a result of the deal, banks could conduct more sensitive transactions but there are concerns that the measures could cause issues with anti-money laundering (AML) and KYC regulations.

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Chainlink is joining forces with Swift, a globally recognized messaging network, to create a new way for banks to make payments using blockchain technology. In other words, Chainlink is putting out a new solution that allows institutions to use Swift messages to communicate with blockchain tech.

This integration means digital asset settlement could be much smoother with minimal changes needed to the current systems. Essentially, it’s building a connection between traditional finance and decentralized finance.

Sergey Nazarov, the co-founder of Chainlink, announced these benefits during a conference organized by Swift in Beijing, China. Explaining further, Nazarov added that this new solution will allow transactions and settlements to be confirmed through Swift, which is already commonly used in traditional finance.

Once a transaction’s been confirmed, Chainlink’s system will turn these messages into blockchain actions, allowing institutions to lock in assets and make payments on-chain.

But, there’s more than that. Nazarov also introduced a new feature called the Blockchain Privacy Manager (BPM). In simpler terms, this is a tool designed to maintain privacy when integrating private chains with the public Chainlink platform. It’s really a tool for financial institutions that want full privacy when using blockchain apps. This feature is encrypted by the Chainlink Cross-Chain Interoperability Protocol (CCIP) Private Transactions.

Coupled with the new integration with Swift, this feature could now allow institutions to make more sensitive transactions, like private tokenized asset trading or cross-border payments.

However, keep in mind that increased privacy could raise questions around regulations like Anti-Money Laundering (AML) and Know Your Customer (KYC) due to the lack of transparency. Also, having privacy controls within Chainlink’s system could go against decentralization principles and might face criticism for giving too much power to institutions. These private transactions may not be subject to public scrutiny or consideration.

Source: Cointelegraph