Insights From Chainlink 2024 Hong Kong SmartCon On Blockchain And Traditional Finance Integration

According to Odaily, the Chainlink 2024 Hong Kong SmartCon conference, themed 'Integrating Blockchain with Traditional Finance,' saw numerous traditional financial institutions actively exploring the deep integration of digital assets and on-chain finance. During the event, Andrew Wong, Executive Director at UBS, shared several insights on the driving forces behind the adoption of tokenized fund products by market forces and asset managers. Wong highlighted three main drivers: Firstly, from the supply side, the perspective of asset issuance, where the legal and regulatory considerations of asset tokenization were previously complex. However, products like ETFs provide a standardized and convenient tool for this purpose. Secondly, from the demand side, as more liquidity or cash flow becomes available on-chain, whether through tokenized bank deposits, CBDCs, or stablecoins, investment products will bring more liquidity. Thirdly, the pilot of tokenized products on public blockchains, such as their attempt at asset tokenization on the Ethereum chain last year, has led them to seriously consider the core of the product, smart contracts, and their usage, similar to APIs outside firewalls. They observed that offering a product in this manner also determines the type of assets users will connect to. These structural market forces collectively drive the development of tokenized assets.