Capital Markets / Collateral

Capital Markets on Canton: Collateral Mobility

Blockchain in capital markets means issuing, financing and settling securities on shared ledgers. Canton hosts live examples in bond issuance, repo, collateral and cash settlement.

Summary

Blockchain in capital markets is the use of shared ledgers to issue securities, finance them and settle trades, with the asset and the cash recorded on the same infrastructure. The gain is less about speed and more about removing reconciliation between institutions and making settlement conditional on both legs. Several of the largest live deployments run on Canton.

How it works

Adoption has moved from pilots to production in four areas: issuance, repo, collateral and cash settlement. Issuance came first. By January 2025, Canton-based platforms accounted for 57.5% (over $4.6 billion) of about $8 billion in digital bonds issued since 2022, according to Canton Network, citing The Value Exchange. Repo is the largest by volume. Collateral and tokenized cash are the newest.

Issuers in that dataset include the European Investment Bank, KfW, the Hong Kong Monetary Authority, Deutsche Börse and HSBC. Digital issuance mostly changes the back office. The ledger is the register, so allocation, settlement and coupon payments work from one record instead of a chain of custodian books. Two bonds issued on Canton as part of the ECB's exploratory trials settled atomically.

Repo is where the volume is. Broadridge's Distributed Ledger Repo (DLR) migrated from VMware's blockchain to Canton in 2023 and uses Daml to model repo trades and their lifecycle events. In August 2026 it processed an average of $351 billion a day, $7.4 trillion for the month, and in September Broadridge added G7 securities for cross-border repo and collateral moves. The underlying repo is ordinary. What changed is that the securities and cash move together in one transaction.

Collateral mobility is the next step. In a 2024 pilot, Digital Asset, Euroclear and the World Gold Council tokenized UK gilts, Eurobonds and gold on Canton, and concluded that tokenization makes collateral transfers more efficient. The appeal is plain: collateral that can move between entities and time zones in minutes does not need to be pre-positioned everywhere just in case. Euroclear's follow-on work with Digital Asset has its own page.

Settlement needs a cash leg on the same ledger, and that is the piece that arrived most recently. In January 2026, Lloyds Bank issued tokenized sterling deposits on Canton, and Lloyds Bank Corporate Markets used them to buy a tokenized UK gilt issued by Archax. Archax then moved the funds back into a regular Lloyds account. It was a small trade. It mattered because both legs, a government bond and bank money, sat on one network.

The limit today is network reach, not technology. A tokenized bond settles atomically only if the buyer's cash is on the same network. Otherwise the trade falls back to a conventional payment leg and the settlement window returns. Legal finality, CSD licensing and accounting treatment still differ by jurisdiction. That is why most live volume sits in repo and collateral, where the assets are high quality and the participants are few and known.

Business goal

Impact

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