A Group of firms, including Goldman Sachs, Microsoft, Deloitte, and others, are teaming up to launch a new blockchain-based system. The system, called the Canton Network, aims to link various institutional applications while offering better privacy and controls than existing technology.
According to a statement released, the system can achieve the scale and performance required by financial institutions. Digital Asset unveiled a major project to reshape the digital assets landscape. Having harnessed blockchain technology to reshape FinTech, the company announced the launch of the Canton Network. This could be a seminal collaboration in the world of web3.
As per the press release, the Canton Network will provide a decentralized infrastructure that connects independent applications built with Daml, Digital Assets smart-contract language. It will create a network of networks, allowing previously siloed systems in financial markets to interoperate with the appropriate governance, privacy, permissions and controls required for highly-regulated industries. It will enable financial institutions to experience a safer and reconciliation-free environment where assets, data, and cash can synchronize 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 collateralized financial transaction via connection to a repo or leveraged loan application.
The participants mentioned in the release 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.
Canton Network is poised to render legacy settlement systems obsolete, as their inefficiency was demonstrated during the GameStop short squeeze. If the Canton list of participants expands, institutions will have real-time information on asset flows, removing trading latencies and expediting transactions. Despite being a private blockchain, regulators could still access all transactions across the blockchain’s immutable ledger. Likewise, businesses can use Canton to automate payments thanks to smart contracts, reducing errors and payment failures. Combined with encroaching AI systems, it is not difficult to see that many HR and accounting departments could be made obsolete.
Canton’s blockchain interoperability will accelerate the deployment and trading of digital.
Bloomberg reported that the Canton Network will begin its testing phase in July. Moreover, the system is set to feature “better privacy and controls than currently available.” Also set to feature a scale that is fitting for “financial institutions,” the report noted. Thus, likely impacting the financial services offered by these various firms.