Real Economy Goes Tokenized: Canton Network Launches Network Signals

Canton Network, the financial services sector’s first privacy-enabled interoperable blockchain “network of networks”, was launched this month. Its aim is to help capital markets embrace blockchain as a key enabler of the next era of financial services: digital transformation. By tokenizing and fragmenting real-world assets using distributed ledger technology (DLT), the network hopes to unlock a world of transformative new opportunities for both traditional and new assets, while expanding access to them for new and existing investors.

Larry Fink of BlackRock has expressed his strong support for tokenization as “the next generation of markets.” Boston Consulting Group predicts about $16 trillion worth of assets will be tokenized by 2030, and BlackRock estimates that the tokenization of private market assets will open up a market worth $290 trillion.

The network is powered by technology from Digital Asset, a New York-based technology company. Digital Assets are technology providers for the network, but they do not control the network in the same way as other participants, as this is a hallmark of blockchain network composition and governance.

The network currently has a growing list of innovators: 3Homes, ASX, BNP Paribas, Broadridge, Capgemini, Cboe Global Markets, Cumberland, Deloitte, Deutsche Börse Group, Digital Assets, DRW, DRWEleox, EquiLend, FinClear, FCX , Gambil, Goldman Sachs, IntellectEU, Liberty City Ventures, Microsoft, Paxos, Right Pedal LendOS, SBI Digital Asset Holdings, The Digital Dollar Project, Umbrage, Versana, VERT Capital, Xpansiv, Zinnia.

Critics and charlatans are voicing that although blockchain is most commonly associated with cryptocurrencies, these tokens are the first of what blockchain’s underlying distributed ledger technology enables. And just like today, much discussion about blockchain is clouded not by technical flaws or limitations, but by a false dichotomy that has nothing to do with the actual problem financial institutions are trying to solve.

Rather than debating which technology to use, the key is to determine how technology can be used to solve the real problems faced by financial institutions. The disruptive power of blockchain and distributed ledger technology is at work more than disruptive creation. It seems that there is a lot of smart money in the blockchain ecosystem. Historically, the beneficiaries of disruption have often been those with deep pockets who can play the long game. While the well-capitalized major blockchain companies continue to survive, evolve, grow and compete, we are increasingly facing two more well-capitalized components: central banks and financial institutions.

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