Canton Network: Pioneering Privacy and Institutional Adoption in Blockchain Technology

The Critical Role of Privacy in Institutional Blockchain Adoption

Yuval Rooz, CEO and co-founder of Digital Asset, has made it clear: privacy is non-negotiable for institutional adoption of blockchain technology, especially in regulated environments. Speaking at the KBW conference on August 24, Rooz highlighted the unique approach of the Canton Network, an institutional-grade blockchain infrastructure developed by Digital Asset. This groundbreaking platform prioritizes data sovereignty and compliance, distinguishing itself in a competitive blockchain landscape.

"Ethereum (ETH) took 11 years to recognize privacy as a fundamental right, but as early as 2015, we positioned it as a cornerstone in our whitepaper. While retail investors might tolerate limited privacy, institutions cannot—it's a necessity," Rooz stated.

The Canton Network is engineered as a "network of networks," designed to attract financial heavyweights like Goldman Sachs, Citadel, and DRW by integrating robust privacy features within a compliance-driven layer-1 blockchain. Beyond catering to financial institutions, the platform also supports decentralized exchanges (DEXs), providing tailored solutions for varied use cases.

A Decade of Development: Canton’s Institutional Blockchain Evolution

The Canton Network is the result of nearly a decade of meticulous development. According to Rooz, the journey began ten years ago with the drafting of its whitepaper. "We’ve been working behind the scenes ever since. Around a year ago, we launched the network, and we’re planning a major listing by the end of this year," he revealed.

Unlike many blockchain projects that overpromise and underdeliver, Digital Asset has prioritized tangible outcomes. Rooz emphasized that Canton Network already ranks among the top five blockchains in terms of on-chain activity fees—a testament to its efficacy and appeal.

The support of financial giants like Goldman Sachs, Citadel, DRW, and Cumberland Mining further reinforces Canton Network’s institutional focus and credibility.

"Network of Networks": Balancing Privacy, Compliance, and Versatility

Rooz elaborated on the Canton Network’s unique "network of networks" architecture, which centers on privacy and data sovereignty. "Today’s leading chains, like Ethereum and Solana (SOL), aim to attract institutions because they control high-value assets, including U.S. Treasury bonds and equities," Rooz explained. However, the Canton Network sets itself apart by being purpose-built for institutional needs.

Rooz noted, "Institutions like Goldman Sachs, BNP Paribas, and HSBC are already leveraging Canton. Recently, we collaborated with DTCC to issue U.S. Treasuries natively on the network." The platform’s appeal extends beyond financial giants, with two operational decentralized exchanges illustrating its wide-ranging utility.

The distinguishing factor lies in Canton’s privacy features, which are seamlessly compliant within regulatory frameworks—setting it apart as the only layer-1 blockchain of its kind.

Inspired by Swiss Federalism: A Vision for Decentralized Collaboration

The Canton Network’s innovative design draws inspiration from Switzerland’s federal system. Rooz explained, "In Switzerland, individual cantons operate under different rules and systems but interact seamlessly within a unified federal structure."

Canton adapts this principle to blockchain by enabling interoperability across diverse regulatory jurisdictions while maintaining compliance and comprehensive data security. A critical component of this design is the "Global Synchronizer," a decentralized backbone that interconnects individual nodes—referred to as "cantons."

Rooz also highlighted the network’s decentralized token distribution, which strengthens the balance and fairness of its ecosystem.

Regulatory Compliance as a Competitive Edge

While regulation is often seen as a roadblock in the blockchain industry, Digital Asset has treated it as an opportunity. "We operate within a regulated system; there’s no point waiting for rule changes. Canton was designed to comply with existing regulations," Rooz emphasized.

This pragmatic approach has made Canton Network a go-to platform for major institutions. Its ability to meet stringent compliance requirements speaks volumes about its readiness for real-world applications.

Canton Coin: Builder-Centric Tokenomics

Canton Network introduces a fresh approach to blockchain economics with its native cryptocurrency, Canton Coin. This token is used for transaction fees and features a builder-centric economic model. Unlike traditional blockchains where miners and validators dominate rewards, Canton prioritizes developers and ecosystem participants.

"The unique aspect of our tokenomics is that validators and applications share the majority of rewards," Rooz explained. This focus on incentivizing builders has already spurred considerable developer interest, with some projects sustaining their operations entirely through ecosystem rewards rather than seeking external investment.

Privacy: The Cornerstone of Institutional Blockchain

Rooz underscored the universal demand for privacy, particularly among institutions. "Retail investors might tolerate the absence of privacy, but for institutions, it is a critical requirement for large-scale payments and asset transfers," he stressed.

This emphasis on privacy is exemplified by Canton’s partnership with Broadridge, which processes over $300 billion in daily collateral movements. "For financial institutions, privacy isn't just important—it is essential," Rooz asserted.

Canton’s Rapid Growth and Expanding Network Effects

Even before its token listing, Canton Network has achieved remarkable milestones. Rooz revealed that it already ranks among the top five blockchain networks in on-chain fees. The participation of leading global institutions, either as foundation members or ecosystem partners, underscores the platform’s growing influence.

Looking ahead, Rooz promised aggressive ecosystem expansion, with significant updates anticipated in the near future.

A Vision for the Korean Blockchain Market

Rooz expressed optimism about Korea’s evolving regulatory landscape, seeing it as a springboard for growth. "The regulatory developments in Korea remind me of shifts following the recent U.S. administration change. My advice to Korean institutions and companies is to focus on solving real problems that generate tangible value for users," he said.

Cautioning against the distractions of blockchain hype, Rooz emphasized the importance of substance over speculation. "I remain optimistic about Korea’s potential and look forward to creating meaningful business opportunities together," he concluded.