Major financial institutions such as Goldman Sachs, BNY Mellon, and Cboe Global Markets have successfully completed a large pilot test utilizing blockchain technology. A recent report from Bloomberg stated that these institutions executed over 350 simulated transactions using distributed ledger technology on the Canton network, which was launched in May 2023 by Digital Asset Holdings. The transactions covered various areas such as tokenized assets, fund registry, digital cash, repo, securities lending, and margin management. The pilot test involved 15 asset managers, 13 banks, four custodians, three exchanges, and stablecoin issuer Paxos Trust.
The Canton Network, in its announcement on the same day, revealed that 155 participants from 45 major organizations demonstrated settlement across 22 permissioned blockchains connected to its ledger. The network is designed to be a privacy-enabled interoperable blockchain network specifically for institutional investors. It allows financial institutions to transfer regulated assets, data, and cash between each other in real time. The network enables the composition of a digital bond and a digital payment into a single atomic transaction, ensuring simultaneous exchange without operational risk. It also facilitates collateralized financial transactions using digital assets in connection with repo or leveraged loan applications.
Notable participants in the Canton Network include Deloitte, Deutsche Börse, Microsoft, Moody’s, and S&P Global. Tokenization has gained significant interest from institutional investors and celebrities over the past year. For example, the Hong Kong subsidiary of UBS, together with local crypto exchange OSL, tokenized an options call warrant for Chinese smartphone giant Xiaomi’s stock on Ethereum. Argentine soccer legend Lionel Messi also partnered with environmental nonprofit organization Join The Planet to release a tokenized product called PLANET. These examples showcase how asset tokenization is reshaping various industries such as insurance, agriculture, and real estate.