BNY Mellon, Goldman Sachs lead 45 institutions in testing interbank blockchain network.
Goldman Sachs (NASDAQ: GS) and BNY Mellon (NASDAQ: DMF) have led a number of financial institutions in testing the impact of new blockchain networks on capital markets.
Known as the Canton Network, the network was developed by New York-based blockchain startup Digital Asset Holdings and launched in May 2023. It recently completed a pilot program involving 155 participants from 45 major financial institutions, according to the release.
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✅ From 45 to 155 people participated… pic.twitter.com/VAvxCjOupi— Canton Network (@CantonNetwork) March 12, 2024
In the pilot, Digital Asset Holdings provided participants with 22 decentralized applications (dApps) that facilitate fund registration, asset tokenization, securities lending, repo, digital cash, and margin management transactions. All dApps were interoperable via Canton Network’s testnet.
Participants completed 350 transactions through the dApp, which “allows real-time settlement and immediate reconciliation across counterparty systems to be achieved while complying with regulatory asset control, security and data privacy requirements to move assets safely.” ,” says Digital Asset Holdings.
The pilot involved 15 asset managers, 13 banks, four custodians and three exchanges. Banks included BNY Mellon, Goldman Sachs, BNP Paribas (NASDAQ: BNPQF) and Standard Chartered (NASDAQ: SCBFF), while asset managers included State Street (NASDAQ: STT) and Wellington Capital. IEX exchange, payments giant DTCC, payments giant Visa (NASDAQ: V), and stablecoin issuer Paxos Trust also participated.
According to Digital Asset Holdings, leveraging interoperable dApps on the Canton Network reduces costs, inefficiencies and risks while complying with regulatory demands for the issuance and settlement of tokenized assets.
The biggest challenge the company is trying to solve with the Canton Network is the balance between privacy and interoperability. Digital Asset Holdings argues that blockchain has not succeeded in the financial world because participants are hesitant to expose their data. Canton addresses these concerns by providing “the privacy controls necessary to operate within a safe and sound regulatory environment.”
“Canton allows previously disconnected financial systems to connect and synchronize in ways never before possible, while complying with current regulatory guardrails. We are proud to facilitate the pilot and look forward to working with pilot participants to continue identifying additional use cases that can leverage the Canton Network,” said Yuval Rooz, co-founder and CEO of the company. .
Digital Asset has been driving institutional blockchain adoption since its founding in 2014. The most high-profile project was with the Australian Securities Exchange (ASX) to overhaul its payment technology and replace it with a blockchain alternative.
However, the project failed spectacularly last May when ASX officially scrapped the blockchain project. Yuval acknowledged the company’s role in the project’s failure, pointing out that the task was too great for a startup.
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