Oracle provider Chainlink has unveiled the “Chainlink Runtime Environment”, a standard framework for connecting traditional financial architectures, payment systems and legacy institutions with blockchain protocols and smart contracts within a single integrated ecosystem.
According to Chainlink, the integrated Chainlink runtime environment will include the runtime framework previously established by the Common Business-Oriented Language (COBOL) standard. The Common Business-Oriented Language (COBOL) standard is a programming language created in 1959 that made possible the emergence of electronic banking and automated teller machines (ATMs).
The Chainlink Runtime Environment will also replace the Java Runtime Environment (JRE) architecture, which was first developed in the 1990s to enable online banking and has come to dominate online banking applications.
In a November 16 announcement, the Oracle provider explained that the ultimate goal of the unified architecture is to provide a streamlined and efficient user experience by abstracting away the complexity of handling thousands of unique financial systems.
A simplified graphic showing how the Chainlink Runtime Environment works. source: chain link
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Chainlink brings traditional finance on-chain.
Chainlink’s proposed integrated architecture comes among a number of developments designed to bring traditional financial institutions and businesses on-chain.
At the SWIFT Seminar on International Banking Operations (SIBOS) in October 2024, Chainlink unveiled its integration with the SWIFT interbank messaging protocol, which will allow traditional financial institutions to interact with blockchain systems using SWIFT messages.
The oracle provider has also introduced several privacy-enhancing features for institutions and enterprises, including Blockchain Privacy Manager and Chainlink Cross-Chain Interoperability Protocol (CCIP) private transaction options.
Blockchain Privacy Manager. source: chain link
Privacy is a critical yet often overlooked component of enterprise-level blockchain solutions. This prevents companies from transacting using highly transparent public networks for fear of exposing sensitive information or trade secrets.
Chainlink is also experimenting with combining oracles and artificial intelligence to bring sensitive corporate data on-chain and provide accurate, real-time, tamper-proof records of corporate activities such as proof of reserves.
More recently, in November 2024, Chainlink announced the end of its pilot program with SWIFT and Swiss banking giant UBS. The pilot program tested tokenized funds settlement between parties and included options for traditional financial systems to interact with the digital economy without using cryptocurrencies.
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