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- [00:00]
Ryan Reynolds
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- [01:20]
Host
Markets Daily from consensus 2025. Our next guest has been called the Oracle King because he co founded Chainlink, one of the most widely used decentralized Oracle networks. For those of you wondering, Oracles are essential for enabling smart contracts to interact with real world data. Sergey Nazarov joins the show now.
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Sergey Nazarov
Hello.
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Host
Welcome to the desk.
- [01:42]
Sergey Nazarov
Thank you. Thanks for having me.
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Host
You were just telling us you've been to every Consensus since its inception. So thank you for being with us for so many years. I know that you made an announcement here at Consensus 2025 yesterday. Talk to us about what it was.
- [01:57]
Sergey Nazarov
So that was a pretty big institutional announcement between ourselves, J.P. morgan and Ando. J.P. morgan for the first time opened up their infrastructure for doing cash settlement towards a public chain, in this case Ando's public chain for their tokenized treasuries. And Chainlink kind of orchestrated and cross chain connected those two chains. So it connected the JP Morgan private chain that was used for the cash side of the transaction for the payment and then the asset, the delivery of the asset happens on the Ondo chain, which is a public chain. So it's significant as far as you have a large institution like JP Morgan opening up and starting to Work with public chains, you have a solution like Chainlink that can create the necessary interoperability between a JP Morgan private chain and Ando public chain. And you have just kind of the, the nature of the transaction being a big deal because you have high quality tokenized Treasuries and you have high quality on chain cash settlement and payment. So it's kind of like the institutional version of the future coming into existence.
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Jen
Sergey, Jen and I were both at the Ondo Summit. You just made your announcement. There's so much excitement and interest right now in tokenization and these real world assets. In your opinion, what do people need to know? What do they need to understand about tokenization and why it is so revolutionary?
- [03:22]
Sergey Nazarov
So tokenization actually extends to all parts of the economy. Stablecoins cover currencies and cash. Tokenized funds, which is the largest category of tokenization other than stablecoins covers the asset management industry, the fund manager industry. So that's like BlackRock, Fidelity, Vanguard, but really tokenization of all equities, all commodities is what's next. And the reason that tokenization has a lot of value is because the traditional financial system was basically made about seven years ago. It has huge costs, huge levels of fraud, huge delays. Many of the systems in the current financial system, they work on what's known as 21, 5, so 21 hours a day, five days a week. The crypto system, for example, works 24, 7, 365. Settlement times in the traditional system can range from days to weeks. Settlement times in the crypto system ranges from seconds to minutes. You have the ability to verify data much more quickly, which reduces the gap in time in which fraud and failure can happen. So there's many, many different reasons why different categories of assets or payments find tokenization useful. But to really understand that, you need to subdivide it by category. So stablecoins have a kind of their category of use for blockchain technology that's mainly global distribution. So you don't need a local bank. In a country where you don't have a good banking system, you can still have stablecoins. That's an example of the power of tokenization. For stablecoins, tokenized funds have the ability of global distribution, global liquidity and the ability to automate how they operate, which lowers their cost. So the application of tokenization kind of varies by by use case. Also the value it provides to that specific use case.
- [05:11]
Host
When you attended the first consensus all those years ago, did you think that in 10 consensus from now you'd be sitting Here announcing a partnership with J.P. morgan. Yeah, you did. You did see that?
- [05:26]
Sergey Nazarov
Well, yeah. I mean, in 10 years. Yeah, in 10 years. I thought it'd be sooner. I'm an optimistic guy. I thought it'd be significantly sooner than. But I'm just, you know, that's a caveat. You should know. I always. I always think up until November of every year that this is the year. That's my view usually every year. So right now, this is the year. This is the year everything is happening. I think it's this year or next year, actually. I like that. But. But, yeah, I would have seen it. The thing that actually surprises me about this consensus is this is the same venue that sibos, the large Swift conference, was held at a few years ago. I think it was like, 2023. So if you asked me in 2023 if consensus, the largest crypto industry conference, would be held in a huge conference center of this size, would, I think, like, well over 10,000 attendees that I wouldn't have been sure about. So, like, the. The rate of our industry's growth, even in those few years, is massive. So I've literally been in this Conference center now three times, two times for SIBOs, but now for the first time for Consensus, which for me is a very big sign of the industry's growth.
- [06:31]
Jen
Well, we love that you're here, Sergey. I mean, we are in Canada. We just had Eric Trump on stage. I know that you were in Washington, D.C. participating in a lot of the sort of summit on digital assets and have been involved in the White House. What's your take right now on where the US Is in terms of really making digital assets more accessible?
- [06:53]
Sergey Nazarov
I think the US Needs to catch up, but it understands it needs to catch up, and it wants to catch up, and it is catching up. So stablecoin legislation, for example, I think is likely to happen before the August recess. The market structure bill may or may not happen before the August recess. It's very possible that it doesn't, but I think it could happen this year. And the U.S. i think people don't fully understand exactly how the regulatory landscape works. The. The US Is what's known as a super regulator, where their decisions ripple out to many other regulators. There's a regulatory international agencies like Iosco and others where the US Is a very strong force. And so if the. If the US Regulatory regime endorses tokenized funds, endorses stablecoins, endorses tokenization of equity, tokenization of commodities, that will massively accelerate the US Financial system, which is still the largest financial system in the world. And the US financial system, once it can make money and once it can do it in a way that it complies with the law, it usually moves pretty quickly. And often it takes too much risk or moves too quickly. And that's why you have certain boom and bust cycles in the US kind of financial markets. So I think once there is this green light from the US legislative process, from rulemaking, from the SEC and the cftc, and from other agencies like the OCC under the treasury, you will have a kind of inflection point that that's what I expect to see. And that inflection point will affect the Canadian market, the global market, just by the US sheer size, and the US influence on regulation globally.
- [08:31]
Host
Sergey, it's been such a pleasure having you at the desk here. We got to wrap it up. We'll see you around the conference. And thank you so much for joining us.
- [08:39]
Sergey Nazarov
Pleasure to be here. Thank you for having me.
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Jen
Thank you, Sergey.
- [08:41]
Sergey Nazarov
Thank you.
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Host
That was Chain Link co founder Sergey Nazarov.
- [08:49]
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