Chainlink introduces private blockchain transactions for institutions.

On Oct. 22, Chainlink introduced two privacy-preserving features aimed at financial institutions seeking to use blockchain applications while ensuring complete end-to-end privacy. The new privacy tools include the Blockchain Privacy Manager, which facilitates the integration of private chains with Chainlink's public platform, and an encryption protocol known as CCIP Private Transactions.

Australia and New Zealand Banking Group (ANZ Bank) will be among the first to trial Chainlink’s privacy-focused features. ANZ Bank plans to implement the technology for cross-chain settlement of tokenized real-world assets (RWAs) under the Monetary Authority of Singapore’s Project Guardian, a tokenization initiative. By leveraging Chainlink’s Blockchain Privacy Manager, institutions like ANZ Bank will be able to connect private chains to public and private blockchains via the Chainlink CCIP network. Additionally, the platform allows for linking traditional finance and enterprise systems to private blockchains through the Chainlink platform, as per the announcement.

The CCIP Private Transactions feature enables institutions to encrypt and decrypt sensitive information, such as token amounts and counterparties, while conducting transactions across multiple private chains. Chainlink emphasized that these privacy solutions allow institutional users to define privacy conditions that protect on-chain data from unauthorized parties, while allowing access to authorized participants or regulatory bodies.

Chainlink highlighted that the lack of secure cross-chain privacy has been a barrier preventing financial institutions from meeting data protection standards, such as Europe’s General Data Protection Regulation (GDPR), when interacting across blockchains. To comply with GDPR, institutions must ensure end-to-end privacy for transactions between private chains and minimize data exposure in transactions between private and public chains.

“Privacy is a critical requirement for most institutional transactions,” said Chainlink co-founder Sergey Nazarov. He added that he anticipates substantial institutional adoption of blockchain as Chainlink’s privacy features now make cross-chain private transactions possible.

“We are excited to continue our collaboration with ANZ and explore how to facilitate large transactions across multiple chains in a way that helps meet their compliance and legal requirements," Nazarov concluded.