We’re excited to welcome – Shaul Kfir, Co-founder of Digital Asset, the company behind the pioneering Canton Network!
Shaul is a software engineer with deep roots in research cryptography and he is one of the original co-authors of libsnark, the seminal zkSNARK library that brought zero-knowledge proofs to blockchains. He holds degrees in Physics and Computer Science (cum laude) from the Technion – Israel Institute of Technology.
Chris: Canton is positioning itself as “where finance flows.” What gap in today’s institutional blockchain landscape motivated the creation of a privacy-first, public chain specifically built for capital markets?
Shaul: We, as well as many others in the finance industry, saw the immense potential of moving capital markets activity on-chain, but there was no real underlying infrastructure on the market to enable this in a capital-efficient, privacy-preserving, and scalable way. That is why we created the Canton Network. Canton Network is the only public blockchain with institutional-grade privacy, combining the control over data that organizations need, with the decentralization and open connectivity of public blockchain.
Chris: What are the common misconceptions you encounter when discussing blockchain and Canton with traditional financial institutions?
Shaul: Privacy is critical, especially for regulated institutions, but other public blockchain networks force a choice between privacy controls and interoperability, either exposing sensitive data or limiting how assets can interact. Canton eliminates this trade off and has been designed with native institutional-grade and highly configurable privacy. Also, we often see misconceptions in the industry around privacy and zero knowledge proofs. Most projects that use zero knowledge proofs use them in a way that does not provide privacy. The notable few who use zero knowledge proofs for privacy make software security and usability tradeoffs that are unacceptable for most businesses.
Chris: Large institutions historically move slowly. Why do you believe now is the moment global finance is ready for synchronized on-chain markets?
Shaul: I believe the convergence of TradFi and DeFi towards a new AllFi reality is a natural evolution. Now, we’re at a point where we’ve proven the value of blockchain and institutions no longer want to do proof-of-concept projects, they want to enable real integrations focused on delivery. That said, privacy and control have long been an obstacle for large institutions. Privacy and control are non-negotiable to make this work for institutions at scale, but most public blockchains do not have these measures built in. With Canton, we’ve enabled privacy, atomic settlement and the ability to mobilize and exchange assets 24/7. Large institutions are able to truly leverage the power of synchronized on-chain markets, and today, Canton is trusted by major institutional leaders like Goldman Sachs, BNP Paribas, DTCC and HSBC. Regulatory clarity, market conditions and increased adoption have tipped the scales as well. The rise of stablecoin adoption has proven the value of the technology, and now institutions have realized they can no longer wait on the sidelines.
Chris: What were the biggest technical breakthroughs required to build Canton and achieve selective data visibility on a public chain?
Shaul: In the early days of Bitcoin, everyone agreed that privacy was important, but there wasn’t enough understanding of how to achieve this. When building Canton, we decided to tackle privacy and do the hard part first. At the beginning, we planned to use zero-knowledge proofs, a technology I helped pioneer, to achieve consensus on private data, but we encountered significant limitations. These privacy solutions were not a fit for large-scale institutional adoption. Architecting intuitive, highly configurable privacy using tried-and-tested, easy-to-understand technologies was a huge nut we cracked. Also, privacy with control was critical as institutions need to be able to prove they have real independent control over how their applications operate. To meet this need, we designed Canton's consensus mechanism so that network participants don't cede a level of control to different validator pools and have complete sovereignty. Against the backdrop of all of this, we knew we needed to maintain the composability of blockchains as we worked to solve these challenges. Maintaining atomic smart-contract calls between independent apps was a top priority for us, and we were able to maintain this, while also adding privacy and control attributes on top.
Chris: Canton uses Daml for smart contracts. Why choose a domain-specific language rather than EVM compatibility, and how does this improve security or composability?
Shaul: We opted to build our own language as existing blockchains and smart contract languages were unable to meet user needs for complex workflows, privacy, and interoperability. To truly bring assets on-chain, we realized you need to be able to model the end-to-end rights, obligations, and privacy of financial assets and agreements that adhere to existing real-world regulations and standards. Daml was foundational to unlocking this level of configurable privacy, access, and ongoing composability for financial applications on-chain.
Chris: Which industries or asset types do you expect to benefit the most from synchronized finance, and why? Which assets will take longer to move on-chain due to regulatory or structural constraints?
Shaul: When it comes to institutional adoption and value, the real unlock is where firms are thinking about the composability and the convertibility of digital assets and on-chain payments. An example is the interplay of tokenized treasuries or bonds with stablecoins or tokenized deposits and how this creates totally new conditions for collateral mobility and round-the-clock financing opportunities. Equities will take longer to move on-chain because of unique structuring requirements. There is a realization that simply tokenizing such assets is not the same as truly bringing them on-chain as real, legally recognized securities. We are seeing a shift to Canton because it's seen as an L1 that provides the on-chain books and records that are trusted by issuers, custodians, and regulators.
Chris: What tangible role does Canton Coin play in synchronized financial markets beyond gas and fees?
Shaul: In addition to paying network traffic fees, Canton Coin incentivizes network utility and rewards those who contribute long-term, durable utility to the ecosystem. Unlike in other networks, every Canton Coin in circulation is earned through network participation i.e., by application providers building high-utility apps and users and infrastructure operators driving activity. The coin’s economics are designed to incentivize value creation over price speculation.
Chris: Can you tell us more about Canton’s wallet SDK and wallet ecosystem?
Shaul: Canton’s wallet ecosystem offers users and builders the freedom to choose how they manage their assets or integrate access. The wallet SDK is also extremely developer-friendly as it allows institutions to build with familiar enterprise tools. The wallet ecosystem has seen strong momentum, now featuring major enterprise-focused wallet providers like BitGo, DFNS and Zodia, among others. The wallet SDK, which allows wallets to seamlessly connect, was key to enabling this. This is also part of our larger strategy to open up the ecosystem to wallet innovation for enterprise and retail firms and give providers the tools needed to leverage Canton’s privacy and configurable access control.
Chris: What does success look like for Canton: replacing legacy financial rails, becoming the default tokenization network, or something else entirely?
Shaul: Our aim is not to change finance, but instead to help finance flow the way people intuitively think it should. Our vision is a world where capital is unlocked, new opportunities can be financed, access is democratised, and the cost of risk and reconciliation is a thing of the past.
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