Chainlink, an Ethereum-based decentralized blockchain oracle network, has launched new technology to help financial institutions maintain data privacy while transacting across blockchain networks.
On Oct. 22, Chainlink introduced two new privacy-preserving capabilities targeting financial institutions that want to use blockchain applications while ensuring complete end-to-end privacy.
The newly launched privacy features include the Blockchain Privacy Manager, which enables private chain integration with the public Chainlink Platform, and an encryption protocol called CCIP Private Transactions.
ANZ Bank to debut the tech for RWAs
Australia and New Zealand Banking Group (ANZ Bank) will be one of the first institutions to pilot Chainlink’s privacy-preserving capabilities.
ANZ Bank will integrate the tech for cross-chain settlement of tokenized real-world assets (RWAs) under the Monetary Authority of Singapore’s tokenization initiative, Project Guardian.
Source: Chainlink
Using Chainlink’s new Blockchain Privacy Manager, institutions like ANZ Bank will be able to connect private chains to other public and private blockchains through the public Chainlink CCIP network. The technology also enables the connection of existing traditional finance and enterprise systems to private blockchains via the Chainlink platform, according to the announcement.
CCIP Private Transactions will allow institutions to encrypt and decrypt private data, such as token amounts and counterparties, while transacting across multiple private chains.
Source: Chainlink
“Chainlink’s new privacy capabilities allow institutional users to define privacy conditions in a way that keeps onchain data private from all third parties and adversaries while enabling authorized parties in the transaction or the compliance industry to view that same data,” Chainlink said.
Why do institutions need private blockchain transactions?
According to Chainlink, a lack of secure cross-chain privacy has been hindering financial institutions from interacting across blockchains in a way that meets data protection requirements, such as Europe’s General Data Protection Regulation (GDPR).
To meet GDPR requirements, institutions must ensure end-to-end privacy for private chain-to-private chain transactions and limit data exposure for private chain-to-public chain transactions.
“Privacy is a critical requirement for most institutional transactions,” Chainlink co-founder Sergey Nazarov said. He added that he expects a significant influx of institutional adoption of blockchains as Chainlink’s private transactions across chains are now possible:
“We are excited to continue our collaboration with ANZ and explore how to make large transactions across multiple chains in a way that helps meet their compliance and legal requirements […].”
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