A group of firms including Goldman Sachs Group Inc, Microsoft Corp, Deloitte and Cboe Global Markets Inc are joining a new blockchain system aimed at linking disparate institutional applications, potentially encouraging broader adoption of distributed ledger technology in financial markets.
Participants in the Canton Network, which is scheduled to begin testing some features in July, say the system offers better privacy and controls than what is currently available.
At the same time, it would achieve a scale and standard appropriate for financial institutions, the companies said in a statement on Tuesday.
Photo: Bloomberg
Other participating firms include Digital Asset Holdings, ASX, BNP Paribas, Broadridge Financial Solutions, Deutsche Borse Group, Cumberland DRW LLC, Moody’s Investors Service, Paxos Trust Co and SBI Digital Asset Holdings Co.
The network would bind together blockchain apps that were created using Daml — a smart-contract language created by Digital Asset, the blockchain start-up formerly led by former JPMorgan Chase & Co senior executive Blythe Masters and backed by some of the world’s largest financial institutions.
Banks and other large corporations have been developing and testing blockchain applications for years in the hope that they can simplify and speed up some of their most complex processes.
Part of the effort has revolved around exploring ways to transform traditional securities, such as stocks and bonds, into tokens on a blockchain. Others have focused on speeding up trading and settlement of various assets, or facilitating international payments.
While a number of systems have been tested and some applications have gone live, such blockchain networks have yet to be taken up on a large scale.
Part of what is holding the existing applications back is their inability to connect different blockchain systems built by different organizations, while at the same time allowing creators to retain the controls and privacy required in regulated financial markets, the network’s proponents said.
As a so-called “network of networks,” Canton says it can overcome this by allowing systems to work together without requiring the entities that run them to give up control.
This could also enable firms to link in systems that are separate in today’s market — for example, asset registries and cash payment systems, the statement said.
At present, Canton can connect existing applications built using Daml — such as Goldman’s Digital Asset Platform, a system for issuing assets on the blockchain — with Deutsche Borse Group’s D7 post trade platform, the statement said.
The network’s reach should grow as more applications are built using this coding language.
While the initiative has gained the support of about 30 firms, there have been several blockchain consortia in finance with high-profile participants throughout the years. Their level of success has varied.
Large blockchain projects in finance are complex: New technology must be deployed across numerous firms operating in regulated markets. The complexity has in some cases resulted in projects being delayed, paused or scrapped.
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