Leading fintech firm Digital Asset, together with 30 other participants, has just launched “Canton Network“, a network of blockchain networks enabling interoperability for financial institutions.
A Global Network Of Networks
Touted as the industry’s first “privacy-enabled interoperable blockchain network”, Canton will allow previously fragmented systems in financial markets to interoperate with the appropriate governance, privacy, permissions, and controls required for highly regulated industries. The new blockchain network aims to provide a decentralized infrastructure that connects independent applications built with Digital Asset’s smart-contract language (DAMI).
We're excited for @CantonNetwork, the industry’s first privacy-enabled interoperable blockchain network designed for institutional assets and built to unlock the potential of synchronized financial markets. #PowerfulConnections https://t.co/rlfKxyRLLT pic.twitter.com/Ha48jGUquo
— Digital Asset (@digitalassetcom) May 9, 2023
Yuval Rooz, co-founder, and CEO at Digital Asset explained the Canton Network will enable financial institutions to experience a safer and reconciliation-free environment where assets, data, and cash can synchronize freely across applications. He added,
“For the first time, financial institutions can realize the full benefits of a global blockchain network while operating within the regulatory guardrails that ensure a safe, sound, and fair financial system.”
Several prominent industry leaders have teamed up to create this “network of networks”. Alongside Digital Asset, other market participants include Deloitte, Microsoft, Goldman Sachs, Paxos, S&P Global, and Capgemini, among many others.
According to the official blog post, with the Canton Network, a digital bond and a digital payment can be composed across two separate applications into a single atomic transaction, guaranteeing simultaneous exchange without operational risk. Additionally, a digital asset could be used in a collateralized financial transaction via connection to a repo or leveraged loan application.
Why Blockchain Interoperability Is Important?
The Canton Network seeks to overcome major shortfalls in the blockchain ecosystem like lack of privacy, control of data, and interoperability, that have hindered its ability to scale. To mitigate these issues, Canton will be offering a decentralized network with the privacy and control essential to operating within a safe and sound regulatory environment.
This will further, help in creating opportunities for financial institutions to offer new innovative products to their clients while enhancing their efficiency and risk management. David Ferrall, FinClear Founder said,
“The Canton Network is an important piece of the global financial infrastructure that effectively addresses a critical gap in the blockchain market. Digital Asset continues to innovate with Daml to move the industry forwards.”
In the burgeoning world of blockchain technology, numerous on-chain networks have come up to meet the unique needs of different industries. This increase in new blockchains has necessitated the need for interoperability between them, to leverage the unique features of each blockchain and allow these networks to communicate with each other to share information, data, and assets. Blockchain interoperability is an important component of decentralization, that aims to ensure secure, efficient, and transparent information sharing between blockchains.