Goldman Sachs, BNY Mellon take part in Canton Network pilot

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Goldman Sachs and BNY Mellon were among the participants in a pilot for Digital Asset’s Canton Network, which has been deemed a success in regard to tokenised assets and enterprise blockchain.

A total of 155 participants, across 45 major organisations, demonstrated settlement across 22 permissioned blockchains connected on the Canton Network, while maintaining the controls required for regulated capital markets, as Digital Asset noted.

Participants ranged from asset managers, to banks, to exchanges, as well as one financial market infrastructure provider. The trial, which lasted four days, invited participants to try 22 dApps (distributed ledger applications) to exchange tokenised securities, money market funds, and deposits across applications.

“The pilot showed the potential of the Canton Network to reduce costs, risks, and inefficiencies, while striving to meet regulatory requirements for the issuance, transfer, and settlement of tokenised traditional assets,” Digital Asset noted.

The trial sought to include institutions with blockchain applications in production. This is where Goldman and BNY Mellon came in, along with Broadridge and Paxos among others, to provide ‘market expertise’ for participants throughout the programme. BNP Paribas, Standard Chartered and Visa also participated. Microsoft acted as a supporting partner in the pilot, while Deloitte was engaged as an observer.

Tokenisation has emerged as a conduit for enterprise blockchain. Previous initiatives had plenty of hope but ended up hitting the buffers. In 2022, the Blockchain Insurance Industry Initiative (B3i) filed for insolvency after backers pulled out. A few months later, Maersk and IBM announced they were discontinuing much-feted blockchain-enabled trade platform TradeLens.

A statement from Maersk at the time noted that while a viable platform had been developed, ‘the need for full global industry collaboration ha[d] not been achieved.’ One analyst noted that this move could be ‘the last chapter in the era of costly enterprise blockchain projects.’

Yet tokenisation, turning physical and intangible assets into digital tokens on a blockchain, is gaining momentum. Frederik De Brueck, head of enterprise blockchain and innovation at Fujitsu Global, predicted as such at the start of this year, proffering that 2024 would be the ‘transformative year’ of enterprise blockchain.

“Tokenisation is reshaping sectors, especially those with physical assets,” De Brueck wrote. “Beyond real estate and art, it’s transforming manufacturing with improved asset tracking and verification and the energy sector with new trading and management methods for resources like renewable energy credits.

“Its impact is significant and transformative, extending beyond asset digitisation to create a new digital ecosystem for managing, trading, and using data and value assets in novel ways.”

For Digital Asset, who launched Canton Network back in May, the pilot represents an ‘important milestone.’ “Canton allows previously siloed financial systems to connect and synchronise in previously impossible ways while abiding by the current regulatory guardrails,” said Yuval Rooz, CEO and co-founder of Digital Asset in a statement.

“We’re proud to facilitate the pilot and look forward to working with the pilot participants to continue identifying additional use cases where the Canton Network can be leveraged,” Rooz added.

You can read the report and survey findings from the pilot here (email required).

Photo by Steve Johnson

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