Partnering with Goldman Sachs GS and Digital Assets, Cboe Global Markets CBOE is launching Canton Network, the first privacy-enabled interoperable blockchain network for institutional assets. Canton Network aims to overcome the limitations of public blockchains by providing a decentralized infrastructure that allows previously isolated systems in financial markets to interoperate while maintaining the necessary governance, privacy, permissioning and controls required for highly regulated industries.
The participating organizations – which also include BNP Paribas BNPQY, Deutsche Börse Group and others – seek to unlock the potential of synchronized financial markets through the Canton Network. The network is designed to address the challenges faced by public blockchains, such as privacy and data control issues, scalability limitations and lack of interoperability. By connecting independent applications built with Digital Asset’s smart-contract language called Daml, the Canton Network enables financial institutions to leverage the benefits of a global blockchain network while adhering to local regulatory requirements, as well.
Yuval Rooz, co-founder and CEO at Digital Asset, emphasizes that the Canton Network represents a significant advancement for the blockchain space. It offers financial institutions the opportunity to leverage a global blockchain network while operating within the necessary regulatory frameworks, ensuring a safe and fair financial system. By enabling a safer and reconciliation-free environment, the network allows assets, data and cash to synchronize seamlessly across applications, creating opportunities for innovation and improving efficiency and risk management for financial institutions.
One of the primary advantages of blockchain technology in regulated markets is the ability to ensure secure and transparent transactions while maintaining privacy and control over sensitive data. Blockchain’s distributed ledger system allows for a tamper-proof record of transactions, enhancing trust and reducing the risk of fraud. Additionally, the use of smart contracts automates and streamlines processes, reducing operational costs and improving efficiency. The inclusion of Cboe, a leading global exchange operator, in the Canton Network highlights the potential impact of blockchain technology in transforming traditional financial markets.
The Canton Network provides several use cases that demonstrate its capabilities. For instance, it enables the composition of a digital bond and a digital payment across separate applications into a single atomic transaction, guaranteeing simultaneous exchange without operational risk. It also facilitates the use of digital assets in collateralized financial transactions, such as repo or leveraged loan applications. These examples showcase the potential for the Canton Network to drive innovation and enable new product offerings while enhancing risk management and efficiency for financial institutions.
The collaboration in creating the Canton Network involves several prominent industry players, including ASX, Broadridge BR, Capgemini, DRW, EquiLend, Microsoft MSFT, Moody’s MCO, Paxos, and SBI Digital Asset Holdings. This diverse group of participants highlights the broad interest in the tech and the recognition of the need for a privacy-enabled interoperable blockchain network in the institutional asset space.
Through their joint efforts, these organizations aim to unleash the full potential of blockchain technology, transforming the way financial markets operate and ensuring a more secure, efficient and transparent ecosystem for all participants.
Featured photo by Shubham Dhage on Unsplash.
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