Goldman Sachs Group Inc, and a group of firms including Microsoft Corp, Deloitte, and Cboe Global Markets Inc are collaborating on a new blockchain system aimed at linking disparate institutional applications and potentially encouraging a wider adoption of the distributed ledger technology in financial markets.
The participants will begin testing some features on the Canton Network in July, it is said that the system offers better controls and privacy than what is available at the moment. According to a statement released by the companies on Tuesday, it will at the same time, achieve a scale and standard appropriate for financial institutions.
Other firms that will be engaging in the test include Digital Asset, Broadridge, ASX, Cumberland, BNP Paribas, Paxos, Deutsche Börse Group, Moody’s, and SBI Digital Asset Holdings. Blockchain apps that were created using Daml — a smart-contract language created by Digital Asset will be connected by the network.
In the past few years, Banks and other large corporations have developed and tested blockchain applications in the hope that they can ease up and make some of their most complex processes much faster.
Efforts have been made towards exploring different ways to transform traditional securities, like bonds and stock, into tokens on a blockchain. Others have prioritized trying to speed up the settlement and trading of various assets or aiding international payments. And although different systems have undergone various tests and some applications have gone live, those blockchain networks are yet to be put up on a large scale.
Their inability to connect different blockchain systems built by various organizations is amongst the things holding the existing applications back, and at the same time allowing creators to retain the privacy and controls that are required in regulated financial markets, which is generally identified as the “network of networks,” Canton claims it will overcome this challenge by allowing the systems to work together without requiring the entities that run them give up control.
The statement said this might enable firms to link in separate systems in today’s market — for example, cash payment systems and asset registries.
According to the statement, Canton can currently connect existing applications built using Daml — one of which is Goldman’s Digital Asset Platform, and the Deutsche Börse Group’s D7 post-trade platform. The reach of the network is expected to grow as more applications are built using this coding language.
Jens Hachmeister, head of issuer services and new digital markets at Deutsche Börse Group was quoted saying “Systems like Canton are a key building block for future digital and distributed financial market infrastructures,”
Although the initiative has received support from about 30 firms, a lot of blockchain consortia in finance with high-profile participants have occurred throughout the years. And they all experienced various levels of success.
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