Microsoft, Goldman Sachs, and Other Big Firms Back Launch of Financial Blockchain

Financial firms like Deloitte, S&P Global, and Moody’s have come together to support the launch of the Canton Network, a blockchain designed to streamline financial markets with Web3 tech.

The network aims to provide companies with decentralized infrastructure that could make transactions more efficient, linking financial systems together and allowing them to operate in a synchronized way, participants said in a press release.

“Assets, data, and cash can synchronize freely across applications,” they said. “This creates opportunities for financial institutions to offer new innovative products to their clients while enhancing their efficiency and risk management.”

The institutional adoption of Web3 tech was still robust last year despite a slump in digital asset prices. The announcement signals that some firms still view blockchain tech positively regarding its potential, despite a regulatory cloud in the U.S. and harm caused by several crypto-native collapses.

The Canton Network leverages a smart-contract language named Daml, created by the software company Digital Asset.

“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,” said Digital Asset co-founder and CEO Yuval Rooz. “This is a significant step forward for the blockchain space.”

The Canton Network has 30 participants so far, including Paxos, Goldman Sachs, BNP Paribas, Cboe Global Markets, and Microsoft—and the group said it expects the network’s number of connections to grow exponentially this year as applications are developed.

The network is addressing some of the most common hurdles holding institutions back from using Web3 tech, the statement said, such as a lack of privacy and control over data, trade-offs with chains that currently offer interoperability, and scaling limitations. And starting in July, network participants will begin testing the network’s interoperability across a range of use cases and applications.

BlackRock CEO Larry Fink said last year that the tokenization of assets—representing assets like stocks with digital tokens—could be an inflection point for traditional finance, holding the potential for “instantaneous settlement” and “reduced fees.”

And some of the Canton Network’s participants seem to agree, including Cathy Clay of Cboe Global Markets.

“At Cboe, we believe the tokenization of real-world assets may offer an unprecedented opportunity,” Clay, executive vice president of data and access solutions, said in a prepared statement, adding it could “create new market infrastructure and drive efficiency in the trading of products across the globe.”