Major financial institutions, including Goldman Sachs Group Inc., BNY Mellon, and Cboe Global Markets, have completed a large-scale pilot test using blockchain technology.
According to a March 12 Bloomberg report, institutional investors executed over 350 simulated transactions via distributed ledger technology in areas such as tokenized assets, fund registry, digital cash, repo, securities lending and margin management on Digital Asset Holdings’ Canton network. A total of 15 asset managers, 13 banks, four custodians, three exchanges, and the stablecoin issuer Paxos Trust participated in the pilot test.
In its announcement the same day, Canton Network said that 155 participants from 45 major organizations have since demonstrated settlement across 22 permissioned blockchains connected to its ledger. The firm stated:
“Over a four-day period, participants were invited to try 22 dApps comprising five fund registries, five cash registries, three bond registries, three trading, four margin, and two financing apps, to exchange tokenized securities, money market funds, and deposits across applications.”
Created in March 2023, Canton Network is a privacy-enabled interoperable blockchain network designed for institutional investors. In part, the blockchain allows financial institutions to move regulated assets, data, and cash between one another in real-time.
“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,” developers wrote, adding: “Likewise, a digital asset could be used in a collateralized financial transaction via connection to a repo or leveraged loan application.”
Current participants of the Canton Network include Deloitte, Deutsche Börse Group, Microsoft, Moody’s, and S&P Global.
Over the past year, tokenization has garnered significant interest from institutional investors and celebrities alike. On Feb. 7, Swiss multinational bank UBS’ Hong Kong subsidiary tokenized an options call warrant of Chinese smartphone giant Xiaomi’s stock on Ethereum together with local crypto exchange OSL. A few weeks later, Argentine soccer legend Lionel Messi announced the release of a tokenized product in partnership with Join The Planet, an environmental nonprofit organization behind the PLANET token.
Related: Insurance, agriculture, real estate: How asset tokenization is reshaping the status quo
