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Microsoft, Goldman Sachs, and More Big Names Team Up To Back Launch of Financial Blockchain

Say hi to the Canton Network, designed to support numerous leading global financial firms.

Firms like Deloitte, Microsoft, Goldman Sachs, S&P Global, and Moody’s have teamed up to support the launch of the Canton Network: a blockchain designed to streamline global financial markets with Web3 technology.

According to a press release on the network’s official website, the “new global blockchain network of networks for financial market participants and institutional assets” will leverage companies with decentralised infrastructure, making transactions more efficient.

As a result, financial institutions can be linked together, allowing them to operate in a synchronised manner, says the press release.

“Assets, data, and cash can synchronise freely across applications,” wrote the participants. “This creates opportunities for financial institutions to offer new innovative products to their clients while enhancing their efficiency and risk management.”

The announcement marks a big leap forward in the institutional adoption of Web3 and blockchain technology, despite slumps in the digital asset market. 

The launch of the Canton Network signifies that some big firms still positively view blockchain technology, and are still interested in its potential, despite a murky regulatory landscape in North America, and contagion caused by several crypto-native company collapses.

The Canton Network uses the smart contract language Daml, created by the software company Digital Asset. 

“For the first time, financial institutions can realize the full benefits of a global blockchain network while operating within the regulatory guardrails that ensure a safe, sound, and fair financial system,” said Digital Asset co-founder and CEO Yuval Rooz. “This is a significant step forward for the blockchain space.”

30 participants are currently in the Canton Network’s roster, including Goldman Sachs, BNP Paribas, Paxos, Cboe Global Markets, and Microsoft. The members expect to exponentially grow the network’s number of connections this year as more applications continue to be developed.

According to the press release, the Canton Network addresses a few of the most common roadblocks for institutions to adopt Web3 tech – such as a lack of privacy and control of data, trade-offs with chains that currently offer interoperability, and scaling limitations. 

Beginning in July, Canton Network participants will begin testing the network’s interoperability capabilities across a range of applications and use cases.


Institutions take on tokenization

Last year, BlackRock CEO Larry Fink spoke at a New York Times DealBook event, arguing that tokenization will be a pivot point for traditional finance as it holds the potential for “instantaneous settlement” and “reduced fees.”

Tokenization refers to the process where a digital representation (or form) of an asset is created on the blockchain. From that point on, the asset lives on the blockchain, where its transaction and ownership history can be authenticated.

Tokenization is already showing itself in many areas of the TradFi world. In November, the Monetary Authority of Singapore (MAS) oversaw JPMorgan, DBS Bank, and SBI Digital Asset Holdings to test out exchanging tokenized versions of Singapore government securities bonds for Japanese government bonds, using the Polygon layer-2 scaling solution Aave.

Speaking about the event, Aave founder Stani Kulechov noted that the Monetary Authority of Singapore’s (MAS) decentralized finance pilot program just executed “the first real-world use case for institutional-grade DeFi protocols.”

The existence of the Canton Network proves that institutional players are on board with bringing tokenization to TradFi, including Cboe Global Markets’ Cathy Clay.

“At Cboe, we believe the tokenization of real-world assets may offer an unprecedented opportunity,” Clay, executive vice president of data and access solutions, said in a prepared statement, adding it could “create new market infrastructure and drive efficiency in the trading of products across the globe.”

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