Sergey Nazarov, one of the creators of Chainlink (LINK), predicts that this year could witness a significant integration between blockchain technology and the traditional global financial system. Speaking at the Consensus 2024 conference, Nazarov highlighted that the market for on-chain assets currently exceeds $100 trillion.

Nazarov presented a chart illustrating how the $2.7 trillion debt market and the $106 trillion stock market could transition onto the blockchain. The chart also demonstrated the potential for tokenization of other assets, including global real estate and derivatives.

According to Nazarov, all financial transactions will eventually occur on-chain, and he believes that 2024 will mark the beginning of the global financial system moving its settlement systems onto public blockchains. He emphasized that the value derived from real-world asset digital asset tokenization, even on public chains, has surpassed that of decentralized finance (DeFi). Moreover, he noted that this estimation does not even include the value in private chains, banks’ chains, and other private systems.

Nazarov envisions a future where all the world’s value, credits, derivatives, and commodities are represented and traded on-chain, allowing for the creation of more advanced financial products in a fast and efficient manner. He expects the transition to on-chain transactions to significantly reduce transaction times, from months to minutes or even seconds. As more assets become tokenized and composable, they will generate additional benefits by being combined into more complex baskets of assets.

The present moment is seen as a tipping point, where the numbers have now exceeded previous expectations, and major institutions are exploring ways to integrate their value onto the blockchain. Nazarov asserts that this year will mark a shift in the industry towards the convergence of public chains and the global financial system into a unified industry, forming a single internet of contracts.

In conclusion, Nazarov predicts a momentous year for the integration of blockchain technology and the traditional financial system, with significant implications for the global economy.