The Canton Network has taken a significant step forward in developing blockchain-based secured financing by expanding its intraday repurchase agreement (repo) transactions to support multiple currencies, varied collateral, and cross-border flows. Digital Asset, a key player in this initiative, announced that a consortium of prominent market infrastructure and trading entities successfully completed a third series of on-chain transactions on Thursday, demonstrating increased sophistication and interoperability within this ecosystem.
This development marks an evolution from previous trials conducted in July and October, moving from reliance on stablecoin settlements to integrating tokenized commercial bank deposits and broader cross-border activities involving multiple currencies. Kelly Mathieson, chief business development officer at Digital Asset, highlighted that this progression reflects the industry's endeavor to enable collateral and cash—the foundational components of secured financing—to move simultaneously on a shared blockchain platform with near real-time finality.
The transactions featured tokenized commercial bank deposits sourced from LSEG's Digital Settlement House (DiSH), which served as the cash leg, complemented by tokenized collateral comprising European government bonds and U.S. Treasuries. Settlement occurred in both euros and U.S. dollars, illustrating the platform's multi-currency capabilities.
By employing tokenized commercial bank deposits instead of stablecoins, the consortium introduces a "real cash" alternative for on-chain repo settlements. This is a critical advancement in bolstering the practical uses of blockchain technology within traditional financial markets. Furthermore, this round of transactions welcomed participation from European market infrastructures, extending previous single-currency tests and reflecting a more inclusive, pan-European approach.
Despite the technological infrastructure and legal frameworks being in place, operational factors remain the principal challenges impeding broader deployment. Mathieson pointed out that the most significant non-technical obstacle is the duration required for market participants to onboard onto the new Canton applications. The process still necessitates Know Your Customer (KYC) compliance, which presently takes a timeframe comparable to traditional finance (tradfi) procedures.
The working group behind this initiative consists of Cumberland DRW, Digital Asset, Societe Generale SA, Tradeweb Markets Inc, and Virtu Financial Inc. New members who recently joined include Euroclear, Euronext, LSEG, and TreasurySpring, expanding the initiative's depth and reach.
LSEG’s DiSH cash service facilitates the transfer of commercial bank deposits to network members while enabling 24/7 tokenization and transferability of cash. Bud Novin, head of payment systems within post-trade solutions at LSEG, expressed enthusiasm about DiSH's potential to provide an authentic cash solution for digital asset transactions. Tokenizing DiSH cash on the Canton Network provides users with an interoperable commercial bank money solution on-chain, allowing seamless settlement against other tokenized assets.
Euroclear aligns this project with its strategy to digitize finance and improve collateral mobility. Jorgen Ouaknine, Euroclear’s global head of innovation and digital assets, emphasized combining Euroclear's central role in global collateral flows with a digital infrastructure aimed at unlocking new liquidity sources and delivering tangible client benefits.
Similarly, Euronext regards the project as a manifestation of the broader industry trend toward tokenization and on-chain infrastructures, all while complying with regulated market frameworks. David Leblache, head of innovation and AI products at Euronext, noted that these efforts support innovation designed to enhance market efficiency, resilience, and interoperability.
TreasurySpring, contributing to the treasury investment product segment, views partnering with Canton as beneficial for advancing its digital asset work across the treasury sector.
Looking ahead, Digital Asset indicated that the coalition aims to sustain collaboration on additional on-chain financing projects through 2026. This initiative forms part of a larger ambition to develop a capital markets infrastructure characterized by scalability and constant availability, harnessing blockchain technology to transform secured financing operations and liquidity flows globally.
The Canton Network consortium has successfully executed a third round of intraday repo transactions that broaden the scope of on-chain secured financing to include multiple currencies, diverse collateral types, and cross-border settlements. Utilizing tokenized commercial bank deposits provided through LSEG's Digital Settlement House alongside tokenized European government bonds and U.S. Treasuries, the initiative advances beyond earlier stablecoin-based settlements toward a more versatile and interoperable blockchain infrastructure. While technical readiness is established, operational onboarding processes remain the primary hurdle to wider adoption, with several major market participants collaborating to further develop scalable blockchain-based capital markets solutions through 2026.
Key Points
- The Canton Network consortium has expanded on-chain intraday repo transactions to involve multiple currencies, various collateral types, and cross-border flows, demonstrating enhanced complexity and interoperability.
- Tokenized commercial bank deposits via LSEG’s Digital Settlement House serve as the cash leg, moving beyond stablecoin-based settlements to introduce a real cash option for on-chain transactions.
- The primary limitation to wider adoption is operational onboarding processes, particularly the time required for KYC compliance, rather than technical or legal barriers.
- New members including Euroclear, Euronext, LSEG, and TreasurySpring have joined the working group, signaling broader institutional engagement in digital asset infrastructure development through 2026.
Risks
- Operational challenges, such as lengthy onboarding and KYC procedures, pose the greatest obstacle to scaling and integrating the technology quickly across the financial industry.
- The reliance on multiple institutions and participants requires coordinated alignment, which could slow progress or complicate standardization efforts within the consortium.
- As the initiative evolves, regulatory compliance remains a critical factor, particularly given the involvement of regulated market infrastructures and cross-border settlements.