Firms Combine for Privacy-Enabled Blockchain Network
Posted by Colin Lambert. Last updated: May 11, 2023
Digital Asset and several market participants have announced plans to launch the Canton Network, something the firms claim is the industry’s first privacy-enabled interoperable blockchain network designed for institutional assets and built to responsibly unlock the potential of synchronised financial markets.
Canton Network participants include 3Homes, ASX, BNP Paribas, Broadridge, Capgemini, Cboe Global Markets, Cumberland, Deloitte, Deutsche Börse Group, Digital Asset, DRW, Eleox, EquiLend, FinClear, Gambyl, Goldman Sachs, IntellectEU, Liberty City Ventures, Microsoft, Moody’s, Paxos, Right Pedal LendOS, S&P Global, SBI Digital Asset Holdings, The Digital Dollar Project, Umbrage, Versana, Vert Capital, Xpansiv, and Zinnia.
The Canton Network will provide a decentralised infrastructure that connects independent applications built with Daml, Digital Asset’s smart-contract language. It creates a ‘network of networks’, allowing previously siloed systems in financial markets to inter-operate with the appropriate governance, privacy, permissioning and controls required for highly-regulated industries.
The network also enables financial institutions to experience a safer and reconciliation-free environment, the firms say, where assets, data, and cash can synchronise freely across applications. “This creates opportunities for financial institutions to offer new innovative products to their clients while enhancing their efficiency and risk management,
Canton Network says.
As an example, asset registers and cash payment systems are distinct and siloed systems in today’s markets. With the Canton Network, a digital bond and a digital payment can be composed across two separate applications into a single atomic transaction, guaranteeing simultaneous exchange without operational risk. Likewise, a digital asset could be used in a collateralised financial transaction via connection to a repo or leveraged loan application.
“The Canton Network is a powerful answer to industry calls for a solution that harnesses the potential of blockchain while preserving fundamental privacy requirements for institutional finance,” says Chris Zuehlke, partner at DRW and global head of Cumberland. “This unique approach, coupled with the ability to execute an atomic transaction across multiple smart contracts, is the building block needed to bring these workflows on chain.”
Jens Hachmeister, head of issuer services and new digital markets at Deutsche Börse, adds, “The Canton Network vision strives to enable seamless connectivity across various blockchain networks in the industry. Such solutions are a key building block for future digital and distributed financial market infrastructures.”