The Canton Network, in collaboration with Digital Asset, QCP, and select counterparties, has launched a project to introduce an advanced on-chain collateral and margin management solution for bilateral derivatives. The initiative leverages the Canton Network’s robust privacy features to address inefficiencies in the crypto derivatives market, which suffers from over-collateralisation and the high costs associated with tri-party agents.
Key features include smart contract-based collateral agreements that comply with ISDA CSA margin requirements, automated workflows, real-time access to a shared ledger, and tokenised collateral pledging. The solution enhances operational efficiency while preserving transaction privacy by restricting access to sensitive data. Benefits for market participants include 24/7 on-demand margining, shorter margin cycles, and integration of stablecoins and real-world assets within the Canton Network.
Georg Schneider, Head of Financial Products at Digital Asset, commented: “This collaboration underscores Digital Asset’s dedication to revolutionizing market infrastructure through innovative, blockchain-powered solutions within the Canton Network. We are excited to bring privacy to on-chain collateral management, which will allow for the automated flow of funds between counterparties in a secure way without publicly disclosing open derivatives positions.”
Darius Sit, Founder and CIO at QCP, added: “We are excited to spearhead this initiative with the Canton Network to redefine the future of derivatives markets. Its unique ability to deliver privacy forms the foundation for a groundbreaking global collateral network, enabling seamless and secure connections across trading venues, brokers, investors, and FMIs. By addressing inefficiencies in collateral management, this initiative reinforces our commitment to providing clients with trusted, efficient, and scalable solutions that redefine market standards.”
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