HSBC and BNP Paribas have officially joined the Canton Network’s governing body, the Canton Foundation, expanding the membership to 30 entities. This inclusion follows the recent entry of prominent institutions such as Goldman Sachs, Moody’s, and the Hong Kong Monetary Authority in March, thereby increasing the count of global systemically important banks (G-SIB) in the network to four, with BNY Mellon also among the members.
Both HSBC and BNP Paribas operate their individual enterprise blockchain networks utilizing Canton technology from Digital Asset. However, these networks remain somewhat isolated in terms of functionality. The Canton Network provides a public framework with a designated group of permissioned validators, significantly enhancing interoperability among its members. This development implies that the digital assets on their proprietary networks may be traded on Canton-linked trading venues, utilized as collateral across different networks, or settled using digital currencies based on the Canton platform. Notably, one of the distinguishing features of the Canton Network is its commitment to privacy, setting it apart from other public blockchain systems.
Another member of the Canton Network that holds potential relevance for HSBC and BNP Paribas is Tradeweb Markets, which runs several trading platforms, including one of the leading bond trading venues globally. Both banks have been actively involved in hosting digital bond issuances on their respective blockchain platforms. Notably, BNP Paribas facilitated the first European Union sovereign digital bond issuance from Slovenia last year, amounting to €30 million, which was subsequently redeemed during EU settlement trials. Meanwhile, HSBC recently supported the Luxembourg State Treasury in issuing a €50 million six-month note on its Orion platform, following a significant $750 million issuance for Hong Kong last year.
The strategic positioning of HSBC and BNP Paribas within the Canton Network is expected to foster greater collaboration and innovation in the realm of digital assets and blockchain technology, providing new avenues for trading and settlement in an increasingly digital financial landscape.
