Could “Canton”, a new network solution by DLT system provider Digital Asset, be “a blockchain financial institutions can say ‘yes’ to”? The company suggests it will, and heavyweights including BNP Paribas, Deutsche Börse and Goldman Sachs are participating.

In a recently published 17-page white paper, Digital Asset lines out its bid on how to design a blockchain network apt for traditional financial institutions.

The solution makes use of the company’s open-source smart contract language Daml. Working with its partners, which include Capegemini, Microsoft, and Deloitte, Digital Asset says it has designed the Canton Network to be privacy-enabled, inter-operable, and easily scalable. Some heavyweights of the finance industry, such as BNP Paribas, Deutsche Börse Group, and Goldman Sachs are already on board and participating in the system.

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While navigating the security and privacy minefield around the emerging technology, the provider tries to address what it sees as success-limiting features from an institutional point of view: the public and unchangeable nature of the data, the lack of control for asset issuers over how users interact with the assets, and the systemic obstacles in scaling.

A “network of networks”

Existing blockchains suffer a bottleneck every time a transaction is made because every transaction is put through a single ordering service. As the number of transactions grow, the chain becomes longer, and more network resources are required, leading to higher transaction fees and a lag time in executing transactions.

In contrast, Canton Network has a decentralised structure. Describing it as a “network of networks”, Digital Asset likens Canton Network to the internet, where every application provider has full control over its application’s permissions and fees, as well as the ability to scale independently. This allows every financial institution on the network to operate with the governance, privacy, and controls appropriate to it.  

Even though every application enjoys a high level of independence, transactions on multiple individual applications can be synchronised and connected. Systems in the financial markets that have so far been siloed could be enabled to inter-operate. All data is confidential by default, and access and authorisation policies can be specified for every user. In this manner, Canton Network seeks to reproduce “the privacy of a private blockchain on a public network”.

Come July, Digital Asset will be testing the inter-operability of Canton Network across a range of applications and use cases with its participants. Read the press release here.

Digital Asset has a high profile among providers of DLT-based platforms for securities – standing behind implementations including the troubled and eventually cancelled one at Australia’s ASX, as well as the seemingly successful one of Deutsche Börse’s D7.