Crypto bounced back after Democrats won control of both the House and the Senate, even as the results could make it harder to push new crypto rules through Congress. Meanwhile, Wall Street’s plumbing is moving on chain. Sergey Nazarov, Co-founder of Chainlink, explains why he sees stablecoins as a bipartisan way to spread the dollar’s reach and how Chainlink is helping modernise financial markets, including work with DTCC. He also looks at why 24 hour markets matter for idle capital, what recent hacks say about security in the age of AI, and why he believes next year could be the breakthrough for institutional adoption.
Get the latest news and updates on FINTECH.TV
Why Tokenized Markets Are Heading for 24 Hour Trading and Why 2027 Could Be the Year
You told President Trump that stablecoins spread the dollar's reach. Does that change with the new Congress?
No. I think Democrats also see stablecoins as an important way to spread the dollar's reach. When I have been in DC I have spoken to many Democratic senators, congressmen and other people in the party. At this point it is pretty clear that stablecoins are only beneficial. Democrats generally have a bleaker view of the crypto industry, but stablecoins are part of what is known as the real world asset industry, or the tokenization trend. That is where blockchain technology provides value that is not speculative in nature but technical in nature. Stablecoins are a technical way to get more US Treasuries held by more people around the world.
With DTCC's tokenization service live and Morgan Stanley among the first banks to tokenize US equities, how is Chainlink helping DTCC modernise financial markets?
DTCC chose Chainlink as its technology partner for key operations on the DTCC app chain, for things like collateral management. The app chain that is being released, together with the tokenization service that has been released, is the DTCC's plan and now a production level implementation of tokenizing equities and putting them onto systems that operate 24 hours a day, seven days a week. Collateral management is an industry that operates five days a week. It does not operate on weekends. There are huge advantages to operating 24/7, and I think the DTCC recognises that, and the US financial markets are recognising that even ahead of other global markets. That is what we are helping enable with our technology.
Hundreds of billions of dollars in institutional capital sit idle. How is Chainlink helping put it to work?
It is the 24/7 dynamic. If capital is sitting somewhere and you cannot earn yield on it over the weekend, or move it at certain times of day to earn greater yield or reduce risk because the place where you posted collateral is now riskier than you would like, you are stuck. For trillions of dollars, being stuck results in hundreds of millions of lost savings and lost yield for each institution, and that adds up to tens of billions, maybe eventually hundreds of billions of dollars. The shift to 24/7 and to highly interconnected systems, where collateral and equities can be managed, posted and earn yield from different sources, is a huge shift that is going to change a lot about the financial markets.
Chainlink now publishes prices for digital versions of stocks around the clock. Are we heading toward a stock market that never closes?
The price data that we now put out 24/7 is one example of what Chainlink does. The collateral management examples rely on orchestration and cross chain connectivity, interoperability and data working together. That gives rise to 24/7 markets, and those are not just about trading. They are also about the utility and all the venues around trading, like lending, collateral management and yield. Much of the time, people choose where to trade based on those utility venues. So you do not just need trading for 24/7. You need lending, collateral management, yield and all those key operations around the trading activity in order for it to become a true 24/7 market and ecosystem. That is exactly what we are enabling now.
How are institutions and companies prioritising security after the Binance hack last week?
I think AI is driving a lot of discovery of exploits and hacks that were previously not discovered. It enables adversaries to do more with less and to cover a wider surface area of an application, in many ways they could not before. Before, you needed an army of people. Now fewer people can attack more of an application or find ways to exploit something that was difficult or time consuming to find. Binance is one example, and there have been other hacks, including big bridge hacks recently where 290 million dollars was stolen, not from us, thankfully. Chainlink has been consistently secure because we monitor and adapt as best we can to changing security dynamics. Even Binance, unfortunately, could not adapt fast enough.
Is 2027 the year institutional adoption moves into real production at scale?
I do see it as the year. There is a caveat: for the last seven years I have seen every next year as the year, up until around Thanksgiving, when I decide that this year is not the year. So we are about three weeks from this year not being the year. But with that caveat, next year is the year, and there are a lot of good reasons for that. The tokenization service from the DTCC is live. It is not a pilot. The app chain from DTCC is going live next year. SWIFT has a ledger that banks can get on now, and a whole bunch of others now have ledgers the way we predicted they would. All of these ledgers and chains, private and public, need to get connected to each other, and we are the ones everyone goes to for that. They all need data, and we are the ones everyone goes to for that. It is not enough for one key financial market infrastructure or one big user to go on chain. You need an ecosystem where whatever goes on chain can benefit from yield, places to post collateral and various utility venues. We need to hit a critical mass where there is enough on chain cash for delivery versus payment, and places to lend and get yield. I think we will hit that level of critical mass this coming year.