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Microsoft and Goldman Sachs-backed Canton blockchain tailored for traditional financial services

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Microsoft and Goldman Sachs-backed Canton blockchain tailored for traditional financial services

Financial credit rating agencies S&P and Moody's, one of the Big Four accounting firms Deloitte, as well as tech giants like Microsoft and Cboe Global Markets, are actively participating in the financial blockchain Canton Network. It has started to be used by companies such as Goldman Sachs, BNP Paribas, and Deutsche Boerse Group, providing decentralized infrastructure for these companies to improve transaction efficiency and connect financial systems together, allowing them to operate synchronously.

Stars Aligning on Canton Network

The Canton Network, which is a decentralized infrastructure, is a collaborative effort involving 30 well-known technology and financial companies such as blockchain software company Digital Asset, Microsoft, Paxos, Goldman Sachs, Deutsche Bank, Cboe Global Markets, S&P, Moody's, and Deloitte. It is built as an independent application using Digital Asset's smart contract language Daml.

It allows previously isolated systems in the financial markets to interoperate with appropriate governance, privacy, permissions, and controls required for highly regulated environments. The Canton Network enables financial institutions to experience a more secure, reconciliation-free environment where assets, data, and cash can freely synchronize across applications. This creates opportunities for financial institutions to offer innovative products to customers while improving efficiency and risk management.

Goldman Sachs GS DAP Platform Developed on Canton

Previously introduced, the digital asset platform GS DAP by the American investment bank Goldman Sachs is a digital asset platform developed on the blockchain Canton in collaboration with blockchain software company Digital Asset, utilizing the Daml smart contract language and privacy-supporting blockchain.

In November last year, Goldman Sachs underwrote a €100 million bond issuance for the European Investment Bank (EIB) along with Santander and BNP Paribas, enabling tokenized assets to be exchanged on a distributed ledger through atomic settlement, replacing the traditional Delivery vs. Payment (DvP) mechanism that requires simultaneous delivery of securities through another intermediary, completing the process in just 60 seconds compared to the approximately five business days it takes for traditional bond sales.

In February this year, Goldman Sachs partnered with the Hong Kong Monetary Authority to issue a HK$800 million tokenized green bond, settling and delivering through the Hong Kong Monetary Authority's CMU debt instrument central clearing system, using Goldman Sachs' tokenization platform GS DAP to issue digitally on a private blockchain network.

Interconnecting Various Financial Institution Platforms

The Canton Network can interconnect various financial institution platforms, such as Deutsche Boerse Group's D7 post-trade platform and Goldman Sachs' GS DAP, while preserving the privacy and permissions of each. With more Daml-built applications going into production starting this year, the number of connections on the Canton Network is expected to grow exponentially.

Participants of the Canton Network will begin testing a series of application and use-case interoperability functionalities in July.

The Canton Network, a Gathering of Stars

Thirty well-known technology and financial industry players, including blockchain software company Digital Asset, Microsoft, Paxos, Goldman Sachs, Deutsche Bank, Cboe Global Markets, S&P, Moody's, and Deloitte, have joined forces in the Canton Network, a decentralized infrastructure that interconnects independent applications built using Digital Asset's smart contract language Daml.

It enables previously isolated systems in financial markets to interoperate with the necessary governance, privacy, permissions, and controls required for highly regulated environments. The Canton Network allows financial institutions to experience a more secure, reconciled-free environment where assets, data, and cash can freely sync across applications. This creates opportunities for financial institutions to offer innovative products to customers while enhancing efficiency and risk management.

Goldman Sachs' GS DAP Platform Built on Canton

Previously introduced, the digital asset platform GS DAP from the U.S. investment bank Goldman Sachs is a digital asset platform developed on the blockchain Canton in collaboration with blockchain software company Digital Asset, using the Daml smart contract language and privacy-supporting blockchain technology.

In November last year, Goldman Sachs, along with Santander and Crédit Agricole CIB, underwrote a 100 million euro bond issuance for the European Investment Bank EIB, enabling tokenized assets to be exchanged simultaneously on a distributed ledger, a process known as atomic settlement, replacing the traditional Delivery vs. Payment (DvP) mechanism that typically requires synchronizing deliveries through another intermediary, completing the process in just 60 seconds compared to approximately five business days for traditional bond issuance.

In February this year, Goldman Sachs collaborated with the Hong Kong Monetary Authority to issue an 800 million Hong Kong dollar tokenized green bond, settling and delivering through the Hong Kong Monetary Authority's CMU debt instrument central clearing system, utilizing Goldman Sachs' tokenization platform GS DAP to issue digitally on a private blockchain network.

Interconnecting Various Financial Institution Platforms

The Canton Network can interconnect various financial institution platforms, such as Deutsche Börse Group's D7 post-trade platform and Goldman Sachs' GS DAP, while preserving each party's privacy and permissions. As more Daml-built applications go into production this year, the number of connections on the Canton Network is expected to grow exponentially.

Participants in the Canton Network will begin testing a series of interoperability features for applications and use cases in July.

Digital Asset Co-Founder and CEO Yuval Rooz stated:

For the first time, financial institutions can operate within the regulatory guardrails that ensure a safe, sound, and fair financial system while harnessing all the benefits of a global blockchain network. It is a significant step forward in the blockchain space.