Blockchain technology has been put to the test by major financial institutions, including Goldman Sachs, BNY Mellon, and Cboe Global Markets. In a large-scale pilot test, these institutions executed over 350 simulated transactions using distributed ledger technology on the Canton network, which was launched in May 2023 by startup Digital Asset Holdings. The transactions covered various areas such as tokenized assets, fund registry, digital cash, repo, securities lending, and margin management. The pilot test involved 15 asset managers, 13 banks, four custodians, three exchanges, and stablecoin issuer Paxos Trust.
According to the Canton Network, 155 participants from 45 major organizations have demonstrated settlement across 22 permissioned blockchains connected to its ledger. The network is designed to be a privacy-enabled interoperable blockchain network for institutional investors. It enables financial institutions to move regulated assets, data, and cash between each other in real time. With the Canton Network, digital bonds and payments can be composed across separate applications into a single atomic transaction, ensuring simultaneous exchange without operational risk. It also allows digital assets to be used in collateralized financial transactions through connection to repo or leveraged loan applications.
Notable participants in the Canton Network include Deloitte, Deutsche Börse, Microsoft, Moody’s, and S&P Global. Tokenization has gained significant interest from institutional investors and celebrities in the past year. For example, the Hong Kong subsidiary of UBS tokenized an options call warrant for Xiaomi’s stock on Ethereum, and Lionel Messi announced the release of a tokenized product in partnership with Join The Planet, an environmental nonprofit organization behind the PLANET token. This demonstrates how asset tokenization is reshaping various industries, including insurance, agriculture, and real estate.