ADDX and ANZ Launch Tokenized Commercial Papers Pilot

ADDX, the private market exchange, in collaboration with the Australia and New Zealand Banking Group (ANZ) and Chainlink, has introduced a groundbreaking solution for cross-border transactions involving tokenized commercial papers. This initiative was announced in a statement on November 6, 2024.

Overview of the Partnership

• The project leverages:

  • ADDX’s investment platform
  • ANZ’s Digital Asset Services
  • Chainlink’s Cross-Chain Interoperability Protocol (CCIP), which includes its Private Transactions functionality.

• The goal is to facilitate regulatory-compliant digital asset transactions, enabling financial entities to tokenize and manage these transactions within their existing frameworks.

Rationale for Choosing Commercial Paper

• Commercial paper was selected for this pilot due to its short-term nature.

• The pilot will showcase the entire lifecycle of the asset, including:

  • Issuance
  • Subscription
  • Settlement
  • Redemption

• Australian investors will have the opportunity to purchase and redeem tokenized commercial papers through ADDX, which operates as a licensed market.

Transaction Management and Security

• Transaction settlements will be executed across private blockchains using Chainlink’s CCIP.

• Transaction details will remain confidential across the public CCIP network to comply with regulatory standards.

• Chainlink’s CCIP Private Transactions enhance security by ensuring that sensitive institutional data remains inaccessible to outside parties. This includes:

  • Transaction amounts

  • Counterparty details

  • Bid/ask information

  • Settlement instructions

Statements from Key Stakeholders

• Inmoo Hwang, Group CFO of ADDX, emphasized that the pilot simplifies the entire process for tokenized financial assets, potentially improving:

  • Operational efficiency
  • Settlement speed
  • Cross-border functionality

• Sergey Nazarov, co-founder of Chainlink, highlighted the importance of this use case in advancing blockchain technology. He stated:

  “Privacy of transactions has been a longtime limiting factor in capital markets’ adoption of digital assets and blockchains more generally. With CCIP Private Transactions, we are able to conduct private on-chain transactions in a way that meets the highest level of compliance requirements.”

Project Guardian Initiative

• This project is part of Singapore’s Monetary Authority (MAS)-led Project Guardian, which aims to enhance liquidity and efficiency in financial markets through asset tokenization.

• Project Guardian represents a global collaboration between policymakers and key industry players.

This collaboration between ADDX, ANZ, and Chainlink marks a significant step forward in the integration of blockchain technology within traditional financial systems, paving the way for more secure and efficient financial transactions.