Canton Network Expands On-Chain Collateral Management with Major Liquidity Providers

On July 16, 2025, the Canton Network took a significant step forward by announcing the inclusion of four major digital asset liquidity providers—B2C2, Cumberland DRW, FalconX, and GSR—into its on-chain collateral management initiative. This development marks a crucial expansion of the project that began earlier in the year. The new partners join Flowdesk and QCP as design participants, bringing essential expertise to the table as the initiative prepares for its launch aimed at OTC bilateral derivatives traders in the third quarter of this year.

The collaboration stands to leverage Canton's unique privacy features, creating a robust mechanism for on-chain collateral and margin management specifically tailored for bilateral derivatives. This initiative addresses existing issues in the crypto derivatives market that arise from the absence of an efficient regulatory framework. Currently, many bilateral markets operate either fully or over-collateralized, leading to capital inefficiencies. Moreover, using tri-party agents for collateral management incurs additional costs, thus hindering market efficiency.

Georg Schneider, Head of Financial Products at Digital Asset, expressed enthusiasm over the new partnerships: “We’re pleased to welcome these new partners to the Canton Network as we expand the scope and impact of our on-chain margining initiative... We look forward to working closely with them to shape the future of finance.”

B2C2's CEO for the Americas, Cactus Raazi, emphasized the importance of building infrastructure that meets traditional finance standards for the successful adoption of digital assets. He noted, “Canton's on-chain collateral solution is a crucial advancement, boosting capital efficiency, automation, and privacy in bilateral derivatives.”

Chris Zuehlke, Partner at DRW and Global Co-Head of Cumberland, added, “Our firm has long championed the adoption of blockchain technologies... We believe interoperable, privacy-enabled networks like Canton will play a critical role in the convergence of traditional and digital markets.”

Furthermore, Joshua Lim, Global Co-Head of Markets at FalconX, commented on the potential for improved trading efficiency and security among institutional participants. “Exploring applications like this allows us to test new infrastructure...” he stated.

The primary objective of this collaboration is to develop a solution that incorporates several advanced capabilities, such as on-chain collateral agreements encoded as smart contracts. This feature will facilitate automatic execution and enforcement of terms while ensuring compliance with ISDA CSA Initial and Variation Margin requirements. Through the Canton Network, stakeholders will gain real-time access to data shared exclusively among transaction participants, streamlining margin workflows, enabling instant collateral pledging, and enhancing dispute resolution processes. Moreover, the solution aims to preserve confidentiality by restricting access to transaction details to only the relevant parties involved.

With the introduction of on-chain collateral and margin management for bilateral derivatives, the Canton Network is set to offer various advantages. These include 24/7 margin regimes allowing for on-demand margin payments, shorter margin cycles, reduction in risk and margin requirements, and incorporation of innovative collateral types such as yield-bearing stablecoins or tokenized money market funds.

As for the Canton Network itself, it represents the first public, permissionless blockchain designed specifically for institutional finance, blending privacy, compliance, and scalability. Governed by the Global Synchronizer Foundation and supported by leading financial institutions, Canton enables secure, real-time synchronization and settlement across diverse asset classes using a shared infrastructure. Initially a project by Digital Asset, it is now open-sourced, enhancing decentralized governance and facilitating collaborative app development.

This initiative between the Canton Network and the four liquidity providers heralds a new era of efficiency and innovation in the digital asset space, bridging the gap between traditional finance and crypto operations. As these partnerships develop, the potential for reshaping financial practices and market operations appears promising, driving forward the evolution of the financial landscape.