Canton Network Pioneers On-Chain US Treasury Financing, Driving Institutional RWA Adoption

Executive Summary

Canton Network has successfully completed a pioneering on-chain US Treasury financing, accelerating the tokenization of real-world assets and demonstrating a significant step toward redefining global financial infrastructure. This development is expected to increase institutional interest and investment in the Real World Asset (RWA) sector, potentially leading to a more efficient, transparent, and globally accessible financial system in the long term. It also suggests an evolving global regulatory landscape to accommodate native digital assets.

The Event in Detail

On August 12, 2025, Digital Asset, in collaboration with a consortium of leading financial institutions, announced the successful completion of a groundbreaking transaction on the Canton Network. This event marked the first real-time, fully on-chain financing of US Treasuries (UST) against USD Coin (USDC) on Tradeweb. The transaction surpassed previous on-chain repo activities by delivering near-instant, atomic settlement on a public blockchain, occurring outside traditional market hours, including weekends.

This initiative allowed prime brokers to hold client UST in custodied accounts at a DTCC subsidiary, The Depository Trust Company (DTC), and subsequently enable their clients to create on-chain UST on the Canton Network. This process unlocked the utility of these assets as freely transferable collateral. USDC was minted and redeemed on the Canton Network specifically to facilitate this use case, supporting near-instant liquidity and atomic settlement. This milestone represents a foundational step towards building capital markets where high-quality liquid assets, such as UST, are available and usable at all times, independent of traditional market constraints.

Further solidifying this trend, on September 8, 2025, the Nasdaq Stock Market submitted a proposed rule change to the Securities and Exchange Commission (SEC) to allow for the trading and settlement of tokenized securities. The proposal focuses on tokenized securities fungible with traditional securities, and DTC is reportedly developing a settlement system to convert positions into token form for delivery to DTC-registered wallets on a blockchain.

Financial Mechanics and Strategic Differentiation

The core financial innovation demonstrated by Canton Network involves the on-chain financing of US Treasuries against USDC. Unlike wrapped assets, Canton's approach facilitates "native on-chain assets" that provide holders with direct legal claims. This mechanism transforms UST into freely transferable collateral, enhancing liquidity and mobility within digital markets.

Canton Network achieves operational efficiency through its ability to provide real-time, fully on-chain financing with near-instant, atomic settlement. This capability allows for continuous collateral mobility and financing operations beyond the limitations of traditional market hours. The network's underlying technology utilizes a high-performance BFT consensus mechanism and a two-layer consensus design, ensuring privacy and compliance crucial for institutional adoption without relying on Zero-Knowledge Proofs (ZKPs).

Canton Network's design prioritizes "production-grade, regulator-ready privacy." It implements selective transparency and rights-obligations workflows at the sub-transaction level using a "public permissioned + Daml" model. This architecture enables institutions to protect privacy while complying with regulations, classifying tokenized traditional assets as "Category 1" risk exposures under Basel standards, thereby avoiding punitive capital requirements. Only parties directly involved in a transaction can view relevant data, ensuring confidentiality while maintaining auditability for oversight bodies.

The network operates on a "network of networks" architecture, resembling a transportation network where multiple subnetworks interconnect. This structure, comprising participant nodes and Canton Service Providers (CSPs), enhances scalability and resilience, allowing for secure synchronization and settlement across diverse asset classes.

Market Implications and Broader Context

This development accelerates the broader trend of Real World Asset (RWA) tokenization, positioning the Canton Network as a significant player in redefining global financial infrastructure. Market sentiment is highly bullish for institutional adoption of blockchain technology and RWA, projecting increased institutional interest and investment in the sector.

Canton Network's strategic partnerships with leading financial institutions such as Goldman Sachs, BNP Paribas, HSBC, Microsoft, Nasdaq, Broadridge, and the DTCC underscore its growing influence. Broadridge, for example, is reported to be processing $300 billion daily in on-chain repo transactions using Canton-connected applications. This collaborative approach indicates a move towards deeper integration of traditional finance with crypto ecosystems.

The regulatory landscape is increasingly conducive to blockchain innovation, particularly in the United States, which has adopted pro-crypto policies. Executive orders and a shift in the SEC's stance, including approvals for altcoin ETFs and a crypto-friendly appointee, signify a push towards institutionalizing digital assets into national financial planning. The European Union's MiCAR framework also enforces cross-border crypto compliance, while Asian innovation hubs like Singapore and Hong Kong drive a significant portion of global crypto trading.

The Canton Coin tokenomics are designed to incentivize network participation and utility. The token is earned rather than pre-allocated, with no pre-mine or venture capitalist allocations. Distribution allocates 35% to infrastructure providers, 50% to application builders, and 15% to users. A "Burn-and-Mint equilibrium" mechanism links token supply to demand, ensuring stability and tying value directly to network usage. This framework has supported substantial growth in 2025, including a 40% month-on-month increase in validators and a 20x surge in Canton Coin transfers, averaging approximately 3 million ledger events daily.