(Bloomberg) -- Goldman Sachs Group Inc., BNY Mellon, Cboe Global Markets and several other firms completed a series of pilot tests on a blockchain network that connects different banks and financial institutions, in one of the largest-scale of such experiments in capital markets. 

The network, called Canton Network, was launched last May by the startup Digital Asset Holdings. Participants executed more than 350 simulated transactions on blockchain for tokenized assets, fund registry, digital cash, repo, securities lending and margin management. The goal is to explore potential benefits, including reducing counterparty and settlement risks and optimizing capital. 

“This was just the first time that we could demonstrate so many different types of applications connected together in coordinated synchronized transactions,” Eric Saraniecki, a co-founder and head of strategic initiatives at Digital Asset, said in an interview.

The pilot brings together a wide range of market participants: among the firms are 15 asset managers, 13 banks, four custodians, three exchanges, and the stablecoin issuer Paxos Trust Co. They include abrdn, BNP Paribas, DTCC, DRW, IEX, Nomura, Northern Trust, Standard Chartered, State Street, Visa Inc. and Wellington Management.   

For future use cases, Yuval Rooz, chief executive officer and co-founder of Digital Asset, said “what you will see most activities is around bringing collaterals into these networks, so that you could actually move collaterals 24/7 in real-time.” He is also seeing interest from participants in using the network for private funds and fixed income issuance. 

The pilot shows growing momentum by banks and other financial institutions to push for real-world use of blockchain, after a decade of experimenting with the technology. For the most part, blockchain’s use in the financial system has been limited as the new technology needs to match the resilience of traditional systems when working at scale. 

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Saraniecki said the Canton network overcomes a major pain point: the inability to connect different blockchain systems built by various organizations while maintaining each entity’s privacy and control. For Canton, each blockchain application is akin to a “website,” whereas the network is akin to “the internet.” This allows all the applications to be updated the same time while only viewable to permissioned users. 

While the pilot only uses simulated transactions, Saraniecki said “we do not believe that Canton requires any regulatory changes to bring assets to the Canton network.” 

Goldman has built its Digital Asset Platform, a system for issuing assets on the blockchain, on the Canton network using the coding language Daml. 

Digital Asset previously partnered with Australia’s main exchange operator ASX in its plans to replace its settlement and clearing platform with a blockchain based-system. The plan has been halted.   

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