Digital Asset and leading market participants have unveiled plans to launch the Canton Network, 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, 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 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 interoperate with the appropriate governance, privacy, permissioning and controls required for highly regulated industries. The Canton Network enables financial institutions to experience a safer and reconciliation-free environment 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.
For 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.
Capturing the benefits of public blockchains without the flaws
Until now, smart contract blockchain networks have not achieved meaningful adoption among financial institutions and other enterprises because of three significant shortfalls:
- The lack of privacy and control over data: other chains have shortcomings around privacy that prevent the use of the technology by multiple regulated participants on the same network. There are currently no other blockchains that can offer data protection or control at any layer of its network.
- Other blockchains have had to accept trade-offs between control and interoperability: other chains require operators to forfeit their full control of applications by using a shared pool of validators to gain interoperability.
- Theinability to scale: with applications competing for global network resources and the inherent capacity limitations caused by how public blockchains operate, achieving the scale and performance financial institutions need remains challenging.
The Canton Network removes these obstacles by uniquely balancing the decentralisation of a network with privacy and control essential to operating within a safe and sound regulatory environment. Only the Canton Network enables participants to safeguard permissions, exposure, and interactions across the network, to comply with security, regulatory and legal requirements.
The network can connect innovative blockchain solutions in market today, such as Deutsche Börse Group’s D7 post-trade platform and Goldman Sachs’ GS DAP, while retaining privacy and permissioning. As more Daml-built applications go into production this year and beyond, the number of connections on the Canton Network will grow exponentially. For example, one application’s monthly notional traded exceeds the most active crypto token volumes.
Canton Network participants will begin testing interoperability capabilities across a range of applications and use cases in July.
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