The Emergence of Convergence

Having initially been sceptical, global banks such as UBS, U.S. Bank and Standard Chartered are all now seriously engaging in digital assets. Earlier this year UBS, Switzerland’s biggest bank, began experimenting with using blockchain technology to make digital gold investments more accessible to retail investors. In September 2025, U.S. Bank announced it was resuming crypto custody services for institutional clients after a 3-year pause, as well as adding support for crypto ETFs, while Standard Chartered has launched integrated digital assets trading among other initiatives including venture investments Zodia Custody, Zodia Markets and tokenisation platform Libeara.

At the recent financial services industry flagship event Sibos, Deutsche Börse and Circle announced a partnership on the use of EURC and USDC stablecoins while SWIFT launched a blockchain-based ledger. Separately, HSBC and BNP Paribas recently announced they are joining the Canton Foundation, the governing body of the Canton Network, which is a public, permissionless Layer-1 blockchain designed specifically for institutional adoption.

Canton is certainly having a moment after its parent company Digital Asset secured a $135 million strategic funding round, led by DRW Venture Capital and Tradeweb Markets. The round saw participation from some of the biggest names in both traditional and decentralised finance, including Circle Ventures, Citadel Securities, DTCC, Goldman Sachs, Paxos, and others.

The investment suggests growing support for the blockchain, named after a decentralised governance model used by Swiss cantons. Canton uses a modular, “network of networks” approach, where each application (or subnet) has significant autonomy over its own governance and rules, much like a Swiss canton manages its internal affairs. The approach is designed to facilitate secure transactions for the world’s largest financial players to operate with a high degree of information safeguarding. For digital asset custodians, exchanges and financial infrastructure providers, this is a significant step. It’s the first platform purpose-built to meet the stringent requirements of regulated finance while unlocking the efficiencies of decentralised technology.

Solving the Privacy vs. Transparency Paradox

One of the greatest barriers to blockchain adoption in institutional finance has always been the apparent conflict between the transparency of public blockchains versus regulated firms’ financial confidentiality requirements. Public blockchains are, by default, transparent – an appealing feature for open networks but an obstacle for financial institutions that must safeguard sensitive client and transaction data.

Market participants are looking for solutions built to resolve this paradox, which would allow them to participate in decentralised ecosystems without compromising regulatory obligations or client trust.

Institutional-Grade Compliance

By weaving institutional-grade compliance into its architecture, solutions like Canton and no doubt others to come, are helping to provide custodians and financial institutions with a platform that integrates with existing regulatory structures. This includes the ability to handle tokenised real-world assets (RWAs) such as bonds, money market funds, repos, mortgages, life insurance and annuities. Over $6T in tokenised assets are already issued by or processed on Canton.

Canton’s architecture simultaneously allows for regulatory transparency. One unique feature is that a regulator can be permissioned as an observer party, providing them with a real-time, immutable, read-only view of all transactions they are required to supervise, as they happen. This concept of a “supervisory node” makes proving compliance a continuous, automated process and is a sign of how the future may look.
Building in this kind of regulatory readiness is one reason why big names such as Goldman Sachs, JP Morgan, CBOE, BNP Paribas and Microsoft are becoming active contributors to the ecosystem. The network’s ecosystem participants include asset managers, exchanges and custodians – a critical mass which creates network effects and helps drive efficiency gains for all those involved.

Building With Institutions In Mind

A new trend is that many of the current solutions entering the market are built with institutional readiness at their core. SWIFT’s recently announced blockchain ledger is a case in point with Swift CEO Javier Perez-Tasso commenting: “You may think, ‘Wow, aren’t those opposites? Swift and blockchain. TradFi and DeFi. Can they really go together?’ In the regulated system of the future, we believe they can. Banks are ready for it. And they’re asking us to play a bigger role.” Similarly, Digital Asset made a point of working alongside leading institutions to ensure the Canton network aligned with market realities. Its Global Synchronizer Foundation, for example, governs the network with participation from major financial institutions. The result is a blockchain that feels less like a competitor to existing infrastructure and more like a natural extension of it, with the ability to bridge both traditional and decentralised finance.

The Road Ahead

The financial system of the future is unlikely to be built on siloed blockchains or closed systems. If it is to work well and be sustainable in a world of rapid-paced technology change, it must instead be open, interoperable and privacy concious. As TradFi and DeFi continue their emerging convergence, current market developments are bringing that vision one step closer to reality.