Canton Network Expands On-Chain Repo to Cross-Border Trades

Key Development in On-Chain Finance

A consortium of major financial firms led by Digital Asset has successfully completed a third round of transactions on the Canton Network. The test expanded on-chain intraday repo activity to include multiple currencies, various collateral types, and cross-border flows, marking a significant step for blockchain adoption in capital markets.

Operational Overview

The latest trial utilized tokenized commercial bank deposits provided via LSEG's Digital Settlement House (DiSH) for the cash leg of transactions, settling in both euros and U.S. dollars. This approach offers a "real cash" alternative to stablecoins. The collateral included tokenized European government bonds and U.S. Treasuries. The working group expanded to include key European infrastructures like Euroclear and Euronext.

Economic and Market Impact

This initiative aims to make collateral and cash move in near real-time on a shared ledger, which could significantly enhance liquidity and efficiency in secured financing. While the technology proved successful, Digital Asset identified operational hurdles as the main challenge for wider rollout. The firm stated that traditional Know Your Customer (KYC) onboarding processes remain a time-consuming factor, slowing down adoption.

Summary and Outlook

The working group plans to continue its collaboration through 2026, focusing on creating a scalable, always-on capital markets infrastructure. Future efforts will likely focus on streamlining operational processes to match the speed of the underlying technology and fostering greater interoperability within regulated market frameworks.

FAQ

Q: What was the main achievement of this test?
A: The successful execution of multi-currency and cross-border repo transactions on-chain using tokenized commercial bank deposits instead of stablecoins.

Q: What is the primary obstacle to wider adoption?
A: The primary obstacle is operational rather than technical, specifically the lengthy time required for market participants to complete traditional KYC onboarding processes.

Source: Investing.com