<h2>Introduction</h2> Pay attention when the blockchain company starts receiving checks from BNY Mellon, Nasdaq, S&amp;P Global, and iCapital. Not because $50 million is a lot of money, but because the aforementioned institutions are not speculating on investments. They are investing in what they are going to build. Wall Street’s most risk-averse participants have recently invested heavily into Digital Asset, the company behind Canton Network. This is an indication that institutional adoption is not a topic to be discussed anymore, but it is actually being developed by institutions, which has long been discussed but not realized by the cryptocurrency sector. Currently, the Canton network is able to facilitate $6 trillion worth of tokenized assets, including bonds, stocks, money market funds, and alternative investments. The Canton network has more than 600 institutions on board. This is not a concept test nor is it a pilot project. Large traditional banks are behind it to support financial transactions on a mass scale.<h2> </h2><h2>What Canton Actually Is</h2> Canton Network bills itself as the first permissionless and public Layer-1 blockchain developed with a focus on institutional finance. On paper, it could initially seem more like a PR byword until you understand what it actually involves. Traditional financial institutions face the openness of blockchains. All information regarding the transaction between Goldman Sachs and JPMorgan on Ethereum is public, and competitors, regulators, and blockchain viewers are able to see it. This is beneficial when it comes to cryptocurrencies but not when dealing with trillion-dollar amounts, where privacy and compliance are not optional. In regard to privacy, the Canton solution puts control into the hands of the users by giving them the ability to control who has permission to see the transactions. Meanwhile, it maintains the essential blockchain benefits of fast settling, atomic transactions, and cryptographic validation. You can think of it like having some privacy areas inside a public structure. Everyone is using the same spine, but each transaction takes place within an area accessible only to people who should concern themselves with it. The system is operational on a ‘network of networks’ basis, which facilitates easy communication between different blockchains. A bond issued on the private chain of a financial institution can act as collateral on another chain, and both systems are able to fast-settle without revealing confidential information on either chain.These needs are not able to be met by private blockchains, and are not considered enough by public blockchains. The banks are required to communicate with each other’s systems, but keep their transaction privacy intact. This is provided by Canton.<h2> </h2><h2>Who’s Building It</h2> The $50 million round is interesting not so much by the amount, but by who is behind it. These are not bets on moonshot companies by VCs, but are players with existing infrastructure choosing to invest in it. BNY Mellon clears and safe-keeps international markets. Nasdaq operates exchanges and post-trade services. S&amp;P Global supplies indexes and market data by asset class. iCapital focuses on wealth management technology and alternative investments. Every investment involves a different segment of the conventional financial sector, and each is betting on the future of Canton. This came after a round in June involving Goldman Sachs, Citadel Securities, BNP Paribas, DTCC, and Tradeweb Markets, which raised $135 million. The trend is obvious: it is the institutions which underpin financial markets which are funding the blockchain technology which could supplant the infrastructure which exists. Brian Ruane, the President of Global Clearing at BNY, described the investment as follows: "With the capital markets racing towards a real-time and always-on operating regime, the need to develop financial infrastructure which integrates digital and traditional markets seamlessly has never been more pressing.” This is not a civic passion for crypto. This is a clearing executive acknowledging the fact that, in the world of global and 24-7 finance, technology built for 9-to-5 is not enough anymore. Canton enables 24-7 settlement and gives traditional institutions the privacy and compliance tools they require.<h2> </h2><h2>Why This Matters Now</h2> <a href="https://www.lbank.com/explore/how-real-world-asset-tokenization-is-transforming-global-finance" rel="noopener noreferrer" target="_blank">Tokenized traditional assets</a> have long been touted as the next big thing in the world of cryptocurrencies. The plan was straightforward: place traditional assets on blockchains, empower fast settlement and 24/7 trading, and reshape worldwide finance. Unfortunately, the truth is more complicated. Despite tremendous potential, the concept of tokenization has largely existed in theory. The trend indicated by Canton is clearly a transition. The network is currently managing $6 trillion worth of tokenized assets such as bonds, stocks, money market funds, repos, mortgages, life insurance, and annuities. These are not cryptocurrencies but conventional financial assets using blockchain technology. Use cases vary across the entire spectrum of institutions. Asset managers are tokenizing investment fund shares to enable instantaneous subscription and redemption. Banks are settling repo trades instantly, not over several days. Custodians are administering and managing tokenized securities, relying on cryptographic validation, not reconciliation. Market-makers are using a common, interoperable infrastructure to enable liquidity across various assets. This takes care of true inefficiencies present in traditional markets. Most trades on securities are currently settled in two business days, not because technology is not yet ready to support it, but because the existing infrastructure is designed to handle the transfer of the underlying documents themselves. As soon as atomic, instantaneous transactions are possible, collateral management has relied on person-in-the-loop and overnight batches.<h2> </h2><h2>The AllFi Bet</h2> Canton is promoted by Digital Asset as the basis layer of “AllFi,” the merger of finance and blockchain. The vision is easy to understand: soon, financial markets will operate on blockchain technology. And the future winner, says Digital Asset, is the company that creates the underlying infrastructure that institutions end up using. The competitive environment supports Canton’s strategy. Ethereum-style public blockchain platforms are not suitable to cater to institutions, and they require many alterations because such platforms are more focused on transparency and less on privacy. Another option, which is a ‘private blockchain’ and provides privacy, is not interoperable, so it maintains a separate system in each institution. Central bank digital currencies are yet to mature and could never work on a global level. Canton seeks to strike a balance between having permission-less access and institutional-grade compliance, public infrastructure and private transactions, and blockchain benefits without volatility. Why is it important to pursue such a balance? If only cryptocurrency is adopted, it won't trigger institutional adoption. Rather, it is by creating infrastructure that is more beneficial to institutions than today’s systems. The strategic investors support such a thesis. Companies operating global financial infrastructure are not experimenting with cryptocurrencies, but are getting ready for the moment when said blockchain technology will support their operations. Take, for example, companies such as Nasdaq, which are incorporating Canton into their market infrastructure.<h2> </h2><h2>What This Doesn't Mean</h2> Wall Street is not suddenly lining up to buy into retail crypto. The traction Canton has achieved is on regulated markets, not DeFi protocols. They are not rejecting traditional finance to go to a decentralized solution but working to reimagine it on blockchain technology. Moreover, the $6 trillion of tokenized assets is not a testament to $6 trillion of blockchain adoption. In most instances, it is merely existing assets on a new chain, such as the Canton chain. This is a testament to what it is capable of. It has the ability to support institutions. Moreover, the uncertainty associated with regulations continues. This is because Canton operates within a gray zone, and various governments have adopted differing measures regarding tokenized assets. Although regulations could slow the adoption rate, the infrastructure could work. They are placing a bet on eventual consistency. There is also the possibility that "if you build it, they will come" is not always true. With 600 institutions participating, it is not enough to have people engaged. Building systems to transfer trillions of messages on a daily basis and becoming part of test networks are not the same thing.<h2> </h2><h2>The Quiet Revolution</h2> This is more than just talking about the technology used by Canton itself, just another example of a number of blockchains which have developed such advanced levels of technology. The interesting part is when institutions, which have so much to lose if they are wrong, decide to increase their stakes. This is not a case of using crypto to disrupt the traditional financial system.&nbsp; This is using blockchain to reboot the financial system on a schedule which has due regard to privacy, regulatory requirements, and timeliness. Decentralized finance and disintermediation are not on the agenda, but rather, on the agenda is maintaining control and efficiency.&nbsp; This is what the future of adoption has in store for institutions. DeFi platforms are not intended to replace banks but to empower them, and intermediation is merely intended to occur faster and more efficiently. With so much cash on the line, Canton’s $50 million round is hardly notable on its own. The significance is, rather, who’s signing the checks and it’s the very institutions that shape financial markets who are betting on whether blockchain will merely be the spine of future infrastructure or just an interesting curiosity. They’re clearly betting on the former.

Wall Street giants are funding Canton Network to rebuild financial infrastructure on blockchain. Canton enables private, interoperable, institutional-grade settlement for trillions in tokenized assets

Wall Street Builds Infrastructure Which Crypto Touted


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