Canton Network conducts real-time reuse test of tokenized U.S. Treasuries

The institutional blockchain Canton Network conducted an experiment on collateral reuse using tokenized U.S. Treasuries (collateral reuse). On the 10th (local time), Cointelegraph reported that in this second test led by Digital Asset, the function of processing on-chain financial transactions in real time by combining multiple stablecoins was verified.

A total of five on-chain transactions were executed in this test. In the first July test, a mechanism for settling financial transactions by combining tokenized U.S. Treasuries and Circle's U.S. dollar stablecoin USDC was confirmed. In the second test, the types of stablecoins were expanded to procure various on-chain liquidity, and it showed that tokenized U.S. Treasuries could be moved instantly among multiple counterparties and collateral could be reused.

Kelly Mattison, head of business development at Digital Asset, said, "This test is part of a gradual step toward a new market model," adding, "Real-time collateral reuse is significant in that it can eliminate structural delays in existing financial markets." Justin Peterson, Chief Technology Officer of Tradeweb, also explained, "Confirmation of expanded stablecoin liquidity and real-time collateral reuse is a blueprint showing how the structure of institutional finance may be reorganized in the future, beyond technical verification."

The test included Bank of America, Citadel Securities, Cumberland DRW, Virtu Financial, Société Générale, Tradeweb, Circle, Brail, M1X Global, and others. They are institutions belonging to the Canton Network industry working group and are jointly developing on-chain financial infrastructure.

Canton Network has expanded its foothold in the tokenization market this year. Developer Digital Asset on December 4 secured about $50 million in strategic investment from BNY, iCapital, Nasdaq, and S&P Global. This is additional funding for network expansion following the $135 million fundraising earlier in the year.

Also, Franklin Templeton decided in October to migrate its U.S. money market fund tokenization platform 'Benji Investments' to the Canton Network. According to RWA.xyz under the Bank for International Settlements (BIS), Canton Network currently reflects more than $370 billion worth of tokenized real-world assets on-chain, far ahead of major public chains such as Ethereum, Polygon, and Solana.