Over 500 test transactions using tokenized gold, Eurobonds, and UK government bonds as collateral have been successfully executed on the Canton Network, opening up the potential to unlock trillions of dollars in market value.
Blockchain company Digital Asset, in collaboration with Euroclear, the World Gold Council, and law firm Clifford Chance, has completed a series of groundbreaking tests demonstrating the potential of using cryptoassets as collateral on October 2. The project focused on tokenizing gold, Eurobonds, and UK government bonds, then using them in real-time transactions on the Canton Network blockchain.
This large-scale trial involved 27 leading financial firms and 11 observers. In total, more than 500 atomic transactions were successfully executed across 6 different asset classes, demonstrating the applicability and scalability of the technology.
Tokenization helps address the transportation and storage constraints of physical gold, which is an important collateral asset, said Mike Oswin, Global Director of Market Structure and Innovation at the World Gold Council. Recording additional attributes such as Standard Gold Units (SGUs) on the blockchain allows gold to be used more efficiently in financial transactions, regardless of location.
Alongside gold, Eurobonds and UK government bonds are also chosen for tokenization due to their high liquidity and ease of transport. Digital Asset highlights the significant gap between the $230 trillion global equity market and the $25.5 trillion mortgage market. Tokenization of assets can bridge this gap by unlocking the potential of many asset classes, increasing liquidity and efficiency in the market.
This is not the first time Digital Asset has been involved in pilot projects involving tokenized collateral. The company previously assisted the Depository and Clearing Corporation (DTCC) in testing tokenized U.S. Treasury bonds. Canton Network, a blockchain platform launched by Digital Asset in 2023, plays a key role in connecting the systems of major financial institutions, facilitating complex transactions.