Microsoft along with 31 other leading companies across sectors announced that it will soon launch its own blockchain, called Canton Network.
“The financial industry will undergo a revolutionary transformation with the launch of the Canton Network, the industry’s first interoperable blockchain network that enables privacy for institutional assets. The Canton Network is a decentralized infrastructure that connects independent applications built with Digital Asset’s Daml smart-contract language and creates a network of networks. Companies including BNP Paribas, Deutsche Börse Group, EquiLend, and Goldman Sachs, among others, have used Canton; industry partners include Capgemini, Deloitte, IntellectEU, Microsoft, and Umbrage,” said the Digital Asset company in an official statement, Tuesday (9/5/2023).
According to the statement, the Canton Network was built to address the shortcomings of existing smart-contract blockchain networks, which have not achieved significant adoption among financial institutions and other enterprises due to three major shortcomings. These include a lack of privacy and control over data, a compromise between control and interoperability, and an inability to scale.
Other networks have had to accept a compromise between control and interoperability by requiring operators to give up their full control over applications that use a shared validator pool to gain interoperability.
The network allows financial institutions to experience a more secure and reconciliation-free environment where assets, data and cash can be freely synchronized across applications, creating opportunities for financial institutions to offer new innovative products to their clients while improving their efficiency and risk management.
The Canton Network
The Canton network is the result of a collaborative effort between leading market participants, including 3Homes, ASX, BNP Paribas, Broadridge, Capgemini, Cboe Global Markets, Cumberland, Deloitte, Deutsche Börse Group, Digital Asset, The Digital Dollar Project, DRW, Eleox, EquiLend, FinClear, Gambyl, Goldman Sachs, IntellectEU, Liberty City Ventures, Microsoft, Moody’s, Paxos, Right Pedal LendOS, S&P Global, SBI Digital Asset Holdings, Umbrage, Versana, VERT Capital, Xpansiv, and Zinnia. Industry partners include Capgemini, Deloitte, IntellectEU, Microsoft, and Umbrage.
According to Chris Zuehlke, Partner at DRW and Global Head of Cumberland, the Canton Network is a strong answer to the industry’s call for solutions that harness the potential of blockchain while maintaining the privacy requirements fundamental to institutional finance.
The Canton network is claimed to allow participants to maintain their permissions, exposure, and interactions across the network to meet security, regulatory, and legal requirements. It offers a shared network of trust and transparency that allows participants to harness the power of decentralized technology, access new markets, and drive innovation. The network will be a catalyst for regulated financial institutions to operate together at scale.
The Canton network is set to transform the financial industry by creating new levels of interoperability and efficiency. With this network, financial institutions can synchronize their systems in ways that were previously impossible, eliminating the need for reconciliation and reducing operational risk.
The potential for networks to drive innovation and create new products for clients is huge. For example, the ability to combine digital bonds and digital payments through two separate applications into one atomic transaction could open up new opportunities for investors and issuers. The ability to use digital assets in collateralized financial transactions through connections to repo or leveraged lending applications could also transform the lending industry.
