The Canton Network and QCP Announce Crypto Derivatives Margining Collaboration
ZURICH, Jan. 16, 2025 /PRNewswire/ — The Canton Network today announced the initiation of a project in partnership with Digital Asset, QCP, and a select group of their counterparties as the initial users. This solution will create a cutting-edge, on-chain collateral and margin management solution for bilateral derivatives, leveraging the Canton Network’s unique privacy capabilities.
The project will address the inefficiencies and constraints the crypto derivatives market has experienced due to the absence of comprehensive and accessible regulatory frameworks. Existing bilateral markets are often fully or over-collateralized, creating capital inefficiencies, while the use of tri-party agents for collateral management adds additional cost burdens. Digital Asset’s collaboration with these leading market participants will introduce an automated and cost-effective alternative powered by the Canton Network.
“This collaboration underscores Digital Asset’s dedication to revolutionizing market infrastructure through innovative, blockchain-powered solutions within the Canton Network,” said Georg Schneider, Head of Financial Products at Digital Asset. “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.”
“We are excited to spearhead this initiative with the Canton Network to redefine the future of derivatives markets,” said Darius Sit, Founder and CIO at QCP. “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.”
The collaboration will deliver a solution with several key capabilities, including on-chain collateral agreements encoded as smart contracts to allow for automatic execution and enforcement of terms in line with ISDA CSA Initial and Variation Margin compliance requirements. Using the Canton Network’s shared ledger, parties gain real-time access to a single source of truth, streamlined automated margin workflows, instant tokenized collateral pledging, and automated dispute resolution. The solution also ensures the privacy of collateral transactions, limiting the access of confidential terms and on-chain movements to the relevant counterparties.
The ability to provide on-chain collateral and margin management for bilateral derivatives on the Canton Network will provide several key advantages: 24/7 margining regimes where margin can be paid on-demand, shorter margin cycles, and the incorporation of stablecoins and RWAs in the Canton Network.
About Canton Network:
The Canton Network is the financial industry’s first and only public chain that can achieve on-chain privacy, control, and interoperability, making it the most suitable network for institutional assets. The Network launched for testing with the participation of a group of leading financial institutions, infrastructure providers, technology firms, and consultants in August 2023. Initially built upon Digital Asset’s technology, the Network’s controls, governance, and app development have been open-sourced and decentralized to be managed by all participants, with the goal of fostering greater innovation and Network utility. The Canton Network’s design overcomes the shortfalls of existing blockchain networks by enabling previously siloed systems in finance to become interoperable and synchronized in ways that had been impossible before. Offering the privacy and controls required for highly regulated organizations, the Canton Network creates a safe environment in which assets, data, and cash can move freely across applications in real-time, unlocking new efficiencies and powering innovation.
Press Contacts:
Chatsworth
DigitalAsset@chatsworthcommunications.com
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SOURCE Digital Asset (US) Corp.
