Goldman Sachs, BNY Mellon, and Others Test Enterprise Blockchain for Tokenized Assets

Bluechip financial blockchain provider Digital Asset has successfully completed a test of its Canton Network, with the participation of major financial institutions such as Goldman Sachs, BNY Mellon, DRW, Oliver Wyman, and Paxos. The Canton pilot, which involved 15 asset managers, 13 banks, four custodians, and three exchanges, allowed the firms to seamlessly transact and settle tokenized assets, as well as handle fund registry, digital cash, repo, securities lending, and margin management transactions.

According to a press release on Tuesday, the successful execution of over 350 simulated transactions demonstrated how a network of interoperable applications can securely connect to enable atomic transactions across multiple parts of the capital markets value chain. The test also showcased the potential benefits of using such a network to reduce counterparty and settlement risk, optimize capital, and enable intraday margin cycles.

The interest in enterprise blockchain technology, where large firms seek efficiencies from using private or permissioned versions of the technology underlying public networks like Bitcoin and Ethereum, is being driven by a renewed focus on tokenization. Tokenization involves representing existing financial assets as blockchain-based tokens.

Digital Asset CEO Yuval Rooz highlighted the significance of the Canton Network, stating that it allows previously siloed financial systems to connect and synchronize in ways that were previously impossible, while still adhering to regulatory requirements.

In addition to the aforementioned financial heavyweights, other participants in the pilot included abrdn, Baymarkets, BNP Paribas, BOK Financial, Cboe Global Markets, Commerzbank, DTCC, Fiútur, Generali Investments, Harvest Fund Management, IEX, Nomura, Northern Trust, Pirum, Standard Chartered, State Street, Visa, and Wellington Management. Deloitte acted as an observer, and Microsoft supported the initiative.

The successful test of the Canton Network marks a significant milestone in the adoption of blockchain technology in the financial industry, showcasing the potential for increased efficiency, reduced risk, and improved connectivity in the capital markets value chain. As more firms explore the benefits of enterprise blockchain solutions, the future of tokenized assets and decentralized finance looks promising.