Blockchain application platform Digital Asset has launched the ‘Canton Network’, the industry’s first blockchain network for institutional assets; in collaboration with 29 other market participants – including the likes of BNP Paribas, Goldman Sachs, FinClear, Deutsche Börse and Microsoft.
The new privacy-enabled interoperable blockchain network is designed for institutional assets and built to unlock the potential of synchronised financial markets. The Canton Network will provide a decentralised infrastructure that connects independent applications built with Daml, Digital Asset’s smart-contract language.
The offering creates a ‘network of networks’, allowing previously siloed systems in financial markets to interoperate with the appropriate governance, privacy, permissioning and controls required for highly regulated industries. The network enables financial institutions (FIs) to experience a safer and reconciliation-free environment where assets, data, and cash can synchronise freely across applications. This creates opportunities for FIs to offer new innovative products to their clients while enhancing their efficiency and risk management.
Canton Network participants include 3Homes, ASX, BNP Paribas, Broadridge, Capgemini, Cboe Global
Markets, Cumberland, Deloitte, Deutsche Börse Group, Digital Asset, The Digital Dollar Project, 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, Umbrage, Versana, VERT
Capital, Xpansiv, and Zinnia.
The obstacles of the past
Previously, smart contract blockchain networks have not achieved meaningful adoption among FIs and other enterprises. The Canton Network explained this was because of three significant shortfalls:
1) A lack of privacy and control over data
Other chains have shortcomings surrounding privacy; preventing the use of the technology by multiple regulated participants on the same network.
2) Accepting trade-offs between control and interoperability
Other chains also require operators to forfeit their full control of applications by using a shared pool of validators to gain interoperability.
3) An inability to scale
Applications competing for global network resources and capacity limitations caused by how public blockchains operate, ensuring they can achieve the scale and performances required by FIs has also been a significant challenge in the past.
Tackling past problems
The Canton Network looks to remove these obstacles by uniquely balancing the decentralisation of a network with the privacy and control essential to operating within a safe and sound regulatory environment. The network enables participants to safeguard permissions, exposure, and interactions across the network, to comply with security, regulatory and legal requirements.
Listening to the market
Joseph Cody, principal of Deloitte Consulting LLP, discussed the launch: “Deloitte’s Advisory and Consultancy teams are committed to providing their deep experience in deploying interconnected applications across the Canton Network.
“We are proud to support Digital Asset in serving institutions that are reinventing the industry through the tokenisation of assets, facilitating rapid cross-organisational settlement, creating new marketplaces, establishing an immutable record of shared data, and facilitating secure transactions across the Canton Network.
“This blockchain network also marks the first of its kind, and we are thrilled to collaborate with global leaders embarking on a more connected and efficient future for financial services.”
Yuval Rooz, co-founder and CEO at Digital Asset, also commented on the benefits provided by the Canton Network. Rooz said: “For the first time, financial institutions can realise the full benefits of a global blockchain network while operating within the regulatory guardrails that ensure a safe, sound, and fair financial system. This is a significant step forward for the blockchain space.
“We look forward to helping this founding group of network operators and users build and connect applications to the Canton Network.”
Rashmi Misra, GM of AI, emerging technologies and business development at Microsoft, also said: “We are excited to be a supporting partner of the Canton Network. We look forward to helping the financial community build and scale cloud-enabled Web3 applications on Azure while harnessing the power of AI to improve the user experience and drive developer adoption.”