Why DTCC Chose Canton Network for Privacy-Focused Tokenization of U.S. Treasuries

The Depository Trust & Clearing Corporation (DTCC) has selected the Canton Network, a privacy-focused blockchain developed by Digital Asset, to support the tokenization of U.S. Treasuries. This decision underscores a growing emphasis on data confidentiality within financial infrastructure, particularly as digital asset markets evolve under heightened regulatory scrutiny.

What happened

In December 2025, DTCC announced its choice of the Canton Network to underpin its initiative to tokenize U.S. Treasury securities. Canton is a blockchain platform designed to enable confidential and permissioned data sharing, allowing only authorized participants to access sensitive transaction details while maintaining compliance with regulatory requirements. This platform’s privacy-centric architecture aligns with DTCC’s stated strategic priority to enhance data confidentiality in handling sensitive financial assets.

The Canton Network supports interoperability with existing financial systems, enabling integration without sacrificing privacy controls. It allows for selective data visibility, meaning transaction information is accessible only to relevant parties such as counterparties and regulators. This feature addresses a fundamental tension in digital securities markets: balancing transparency obligations with the need to protect commercially sensitive information.

DTCC’s official disclosures indicate that the tokenization effort aims to improve settlement efficiency and increase transparency where appropriate, while safeguarding confidential transactional data. Independent analyses from sources such as The Block highlight that privacy-preserving features are becoming critical as digital asset markets grow and regulators intensify oversight. Bloomberg’s coverage further frames DTCC’s adoption of a privacy-centric blockchain as indicative of a broader institutional shift toward hybrid transparency models in digital securities.

Why this matters

DTCC’s selection of the Canton Network signals a significant evolution in priorities for financial market infrastructure. Traditionally, transparency has been paramount in securities settlement to ensure market integrity and regulatory compliance. However, as tokenization and blockchain-based settlement systems emerge, preserving confidentiality of sensitive data has become equally important. This shift reflects the complex realities of modern financial markets, where commercial confidentiality and regulatory transparency must coexist.

The Canton Network’s granular data access controls offer a technical solution to this challenge by enabling selective disclosure. Regulators and counterparties can access necessary transaction information without exposing details broadly, mitigating risks related to information leakage or competitive disadvantage. This approach could set a precedent for future tokenization projects, emphasizing privacy as a competitive differentiator and a regulatory compliance enabler.

In the broader market context, DTCC’s move may encourage other financial institutions to consider privacy-focused blockchain platforms for digital asset infrastructure. It also suggests a maturing digital securities ecosystem where hybrid transparency models—balancing openness with confidentiality—become the norm. This balance is particularly relevant for sensitive asset classes like U.S. Treasuries, where data leakage could have systemic implications.

What remains unclear

Despite these confirmed developments, several key questions remain unanswered. The specific technical methods Canton employs to ensure privacy—such as whether it uses zero-knowledge proofs, secure multi-party computation, or other cryptographic techniques—have not been publicly detailed. This limits the ability to independently assess the robustness of its privacy guarantees.

Regulatory oversight mechanisms on a privacy-preserving platform also remain opaque. It is unclear how regulators will verify compliance and audit transactions without compromising confidentiality, as no explicit regulatory frameworks or supervisory protocols have been disclosed in relation to Canton’s deployment.

Further, while Canton claims interoperability with existing systems, there is no publicly available data demonstrating its scalability or practical integration performance. The extent to which Canton can operate seamlessly alongside legacy infrastructure or other blockchains in real-world conditions is therefore unknown.

Finally, it is uncertain whether DTCC’s adoption of Canton will influence broader use of privacy-focused blockchains beyond U.S. Treasuries or prompt wider industry shifts. No forward guidance or strategic roadmap has been made public to clarify the long-term vision for this technology’s application.

What to watch next

Disclosures or technical whitepapers from Digital Asset or DTCC detailing the specific privacy-enhancing cryptographic mechanisms used by Canton.
Regulatory announcements or frameworks outlining how compliance and audit functions will operate on privacy-focused tokenization platforms.
Performance reports or pilot results demonstrating Canton Network’s interoperability and scalability with existing financial infrastructure.
Market participant feedback or adoption signals from custodians, dealers, or asset managers engaging with DTCC’s tokenization initiative.
Broader industry responses indicating whether privacy-focused blockchain models gain traction in other asset classes or markets beyond U.S. Treasuries.

DTCC’s selection of the Canton Network marks a clear institutional recognition that privacy and confidentiality are foundational to the future of financial market infrastructure. However, significant technical, regulatory, and practical questions remain unresolved. How these challenges are addressed will shape the evolution of digital securities markets and the balance between transparency and privacy in years to come.

Source: https://www.coindesk.com/business/2025/12/17/wall-street-giant-dtcc-picks-privacy-focused-blockchain-canton-network-for-tokenization. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.