Major financial institutions, such as Goldman Sachs, BNY Mellon, and Cboe Global Markets, have successfully completed a large-scale trial using blockchain technology. The pilot test, as reported by Bloomberg on March 12, involved over 350 simulated transactions executed by institutional investors using distributed ledger technology on the Canton network. This network, developed by startup Digital Asset Holdings and launched in May 2023, facilitated transactions in areas such as tokenized assets, fund registry, digital cash, repo, securities lending, and margin management. The pilot test included participation from 15 asset managers, 13 banks, four custodians, three exchanges, and the stablecoin issuer Paxos Trust.
In an announcement made on the same day, the Canton Network revealed that since its launch, settlement had been demonstrated across 22 permissioned blockchains connected to its ledger by 155 participants from 45 major organizations. The network, described as a privacy-enabled interoperable blockchain network for institutional investors, enables financial institutions to transfer regulated assets, data, and cash between each other in real time.
According to a press release from Canton, the network allows for the composition of a single atomic transaction, guaranteeing simultaneous exchange without operational risk. For example, a digital bond and a digital payment can be combined into a single transaction across two separate applications. Additionally, a digital asset can be used in a collateralized financial transaction by connecting to a repo or leveraged loan application.
Notable participants in the Canton Network include Deloitte, Deutsche Börse, Microsoft, Moody’s, and S&P Global. Over the past year, tokenization has gained significant interest from both institutional investors and celebrities. For instance, on February 7, the Hong Kong subsidiary of Swiss bank UBS tokenized a call warrant for Chinese smartphone giant Xiaomi’s stock on Ethereum in collaboration with local crypto exchange OSL. Argentine soccer legend Lionel Messi also made headlines when he announced the release of a tokenized product in partnership with Join The Planet, an environmental nonprofit organization behind the PLANET token.
Related: How asset tokenization is reshaping the status quo in industries like insurance, agriculture, and real estate.