The Canton Network announces the addition of B2C2, Cumberland DRW, FalconX, and GSR, four digital asset liquidity providers, to its on-chain collateral initiative.
This marks an expansion of the project, which began in January of this year.
The new additions join Flowdesk and QCP as design partners, “providing expertise on application requirements.”
The application will be open to all OTC bilateral derivatives traders “upon its launch in Q3.”
This collaboration will leverage the Canton Network’s privacy capabilities to create an “on-chain collateral and margin management solution for bilateral derivatives.”
The move will address “inefficiencies and constraints in the crypto derivatives market, which stem from the lack of a comprehensive and accessible regulatory framework.”
Existing bilateral markets are often “fully or over-collateralized, creating capital inefficiencies, while the use of tri-party agents for collateral management adds additional costs.”
Digital Asset’s collaboration with these market participants “will introduce an automated and cost-effective alternative powered by the Canton Network.”
The collaboration will deliver a solution “with capabilities, including on-chain collateral agreements encoded as smart contracts, which will enable the automatic execution and enforcement of terms in line with ISDA CSA Initial and Variation Margin compliance requirements.”
Using the Canton Network, parties gain real-time access “to data shared only among transaction participants– allowing for streamlined automated margin workflows, instant tokenized collateral pledging, and improved dispute resolution.”
The solution also ensures the privacy of collateral transactions, “limiting the access of confidential terms and on-chain movements to the relevant counterparties.”
The ability to provide on-chain collateral and margin management for bilateral derivatives on the Canton Network will “offer several key advantages, including 24/7 margining regimes where margin can be paid on demand, shorter margin cycles, reduced risk and margin requirements, and the incorporation of novel collateral types such as yield-bearing stablecoins or tokenized money market funds.”
The Canton Network is the public, permissionless blockchain “purpose-built for institutional finance—combining privacy, compliance, and scalability.”
Governed by the Global Synchronizer Foundation with participation from global financial institutions, Canton enables “real-time synchronization and settlement across asset classes on a shared, interoperable infrastructure.”
Initially developed by Digital Asset and now open-sourced, Canton “supports decentralized governance and collaborative app development.”
By overcoming the limitations of existing blockchains, Canton unlocks new efficiencies for “regulated institutions and facilitates the convergence between traditional finance and institutional crypto.”
