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.
Other firms participating include Digital Asset, ASX, BNP Paribas, Broadridge, Deutsche Börse Group, Cumberland, Moody’s, Paxos, and SBI Digital Asset Holdings. The network will bind together blockchain apps that were created using Daml — a smart-contract language created by Digital Asset, the blockchain startup formerly led by ex JPMorgan senior executive Blythe Masters and backed by some of the world’s largest financial institutions.
Part of the effort has revolved around exploring ways to transform traditional securities, like 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 various 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’s holding the existing applications back is their inability to connect different blockchain systems built by various 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 claims it can overcome this by allowing systems to work together without requiring the entities that run them give up control.
Growing Reach
Systems like Canton are “a key building block for future digital and distributed financial market infrastructures,” according to Jens Hachmeister, head of issuer services and new digital markets at Deutsche Börse Group.
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. Most notably in November Australia’s main exchange operator ASX announced that it was reassessing plans to replace its settlement and clearing platform with a blockchain based-system that it had planned to build in partnership with Digital Asset.
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