The Bank of New York Mellon Corporation (BNY) has launched a Digital Asset Data Insights product that publishes on- and off-chain data to blockchains. This innocuous sounding product is rather important. And while not rocket science, it is groundbreaking. The world’s largest global custodian will be feeding data about the assets it is administrating directly to public blockchains. In some ways, that’s better than an audit, because it’s up to date and directly from source.
In the recent past there has been a lot of debate about so-called ‘proof of reserves’, which in some cases are prone to manipulation. Proof for real world asset (RWA) tokenization is even more important because the token is often a digital twin that represents an asset held outside a blockchain. In the case of a money market fund, the assets often involve Treasuries.
So far the best we’ve seen in terms of proof is a pdf downloaded from a fund accounting system and posted to the internet. If someone wanted to commit fraud, it would be incredibly easy to automatically tweak and upload fraudulent data. The Circle stablecoin is somewhat better because its reserves are mostly managed by BlackRock, which posts the assets in the fund to its website on a daily basis.
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