In recent years, the financial sector has undergone a transformation fuelled by asset tokenisation and distributed ledger technology (DLT). Digital Asset, co-founded by Yuval Rooz, has positioned itself at the forefront of this evolution. Rooz and his team have developed Daml, an open-source smart contract language that underpins complex, multi-party workflows essential for scalable, interoperable tokenisation across financial systems. He outlined Digital Asset’s journey, including the challenges, regulatory considerations, and recent advancements that showcase tokenisation’s readiness for mainstream finance.

Scaling tokenisation and enabling interoperability

Since its inception, Digital Asset has focused on building solutions that break down silos in traditional financial structures, with Daml central to this effort. The Canton Network, built on Daml, facilitates interoperable and scalable workflows across diverse DLT platforms, akin to the internet’s role in unifying various networks under a common protocol.

Rooz explained how the Canton Network enables different financial applications to interoperate within a single, cohesive framework, even as each maintains distinct governance and operational rules. This approach allows institutions to issue bonds, offer repurchase (repo) services, and manage digital payments across a unified platform while retaining operational flexibility. "Canton’s design, similar to the Swiss canton system, supports autonomous yet interconnected ecosystems," Rooz explained. "For instance, a company could issue a bond on one platform, access a repo service on another, and settle payments with digital cash from a third, all seamlessly integrated."

This layered connectivity has attracted partnerships globally. The Bank for International Settlements (BIS) and regulators such as Monetary Authority of Singapore (MAS), which promote the unified ledger-based “Finternet” initiative, is also aligned in concept and vision with Canton’s, pushing for a robust multi-ledger system that underscores the benefits of Daml’s interoperability and scalability.

Real-world implementations and practical applications

Digital Asset’s collaborations with major institutions demonstrate that tokenisation is already yielding substantial efficiency gains in real-world applications. In Asia, for instance, Digital Asset has partnered with the Singapore Exchange (SGX) to pilot post-trade processes on DLT, aiming to cut down settlement times and reduce operational complexity. In Hong Kong, Digital Asset is working closely with the Hong Kong Exchange and Clearing (HKEX), further illustrating the practical benefits of its tokenisation solutions.

Rooz referred to an example in the mortgage industry, where tokenising mortgage assets has reduced settlement time from the traditional 30 days to mere minutes. Such time savings, enabled by Daml, underscore the immediate operational advantages that tokenisation can deliver. "When clients see their processes streamlined, the business case becomes undeniable," Rooz said. Another major example is Broadridge Financial Solutions’ initiative to tokenise $150 billion in United States (US) Treasury securities, a daily operation that emphasises Daml’s capacity to handle high-volume transactions across interconnected platforms.

In another case, stablecoins—digital representations of fiat currency on blockchain—have scaled significantly, now processing transaction volumes that are reportedly comparable to Visa’s network. This growth in tokenised cash applications showcases tokenisation’s potential when applied to specific, high-impact use cases, providing proof that commercial adoption is well underway.

Navigating regulatory landscape and ensuring compliance

The regulatory framework surrounding digital assets poses a unique challenge, but Digital Asset has focused on developing technology that complements existing legal structures rather than requiring new ones. As a member of the US Commodity Futures Trading Commission (CFTC)’s Subcommittee on Digital Asset Markets, Rooz actively contributes to regulatory conversations, addressing the complexities of aligning digital assets with traditional regulations.

Digital Asset’s strategy is to work within existing frameworks, which accelerates deployment without waiting for universal regulatory harmonisation. "Our approach with Daml and Canton allows us to offer the same financial instruments, just with enhanced efficiency," Rooz explained. By adhering to current standards, Digital Asset can expedite commercialisation and establish credibility with regulatory bodies worldwide. This alignment has been crucial, especially in jurisdictions where regulatory scrutiny is high, such as the US, where tokenised funds are increasingly accepted and issued by major players like Blackrock and Fidelity.

Addressing security and privacy concerns

With the increasing use of tokenised assets, security and privacy have become critical considerations for both regulators and financial institutions. Digital Asset has conducted extensive security audits on its systems, focusing on creating a privacy-first framework within the Canton Network. "Privacy has been our priority from day one," Rooz affirmed, noting how the Canton Network's architecture is designed to protect sensitive data while enabling seamless transactions between participants.

In areas with strict confidentiality requirements, such as corporate actions and collateral management, Digital Asset’s privacy-focused design offers a distinct advantage. Financial institutions adopting the Canton Network can ensure robust privacy controls while benefiting from the network's connectivity. Rooz added, "Clients need to trust that their data remains secure as they transition to these new platforms, and Canton’s architecture ensures this." This commitment to privacy and security aligns with the broader industry push towards secure, efficient digital finance systems.

Overcoming challenges in scaling tokenisation and demonstrating ROI

For tokenisation to achieve widespread adoption, Rooz emphasised the importance of a clear return on investment (ROI) for financial institutions. He points to successful tokenisation projects like Broadridge’s US Treasury tokenisation, as well as examples from JP Morgan and Goldman Sachs, which demonstrate how tokenised assets are delivering measurable business value. JP Morgan, for instance, has developed tokenised deposits and recently expanded into FX settlement, showing the operational efficiency and cost reduction that tokenisation can offer.

"In the case of private equity, we’re seeing clients save up to 18% on operational expenses," Rooz explained. This substantial reduction in costs validates tokenisation’s potential to optimise complex processes. By presenting such tangible ROI data, Digital Asset not only highlights tokenisation’s benefits but also builds a strong business case for institutions still considering adoption.

Industry education and collaboration for broader adoption

Rooz believes that a pragmatic approach to education is essential for promoting tokenisation within the financial sector. Rather than focusing on technical details, he advocates for demonstrating the tangible benefits and values that DLT can deliver, much like the industry has done with artificial intelligence (AI). "Institutions don’t need to know how blockchain works, only what it can do for their bottom line," he says. Digital Asset aims to lead with examples that clearly showcase ROI, helping traditional institutions understand tokenisation’s financial advantages.

Through its initiatives and partnerships, Digital Asset works with financial institutions to explore use cases that clearly illustrate these benefits. For example, in collateral mobility— a key area where DLT can improve asset liquidity—Digital Asset collaborates with industry leaders to demonstrate cost and time efficiencies, building a stronger case for tokenisation across financial ecosystems.

The future

Looking ahead, Rooz is optimistic about the integration of digital assets into traditional financial markets, envisioning a future where tokenised assets are as commonplace as digital banking services today. With real-world implementations underway, Rooz asserted that tokenisation is no longer a concept but a practical tool transforming the industry. "The use cases are there; it’s now time to scale them further," he emphasised.

As Digital Asset continues to build partnerships and enhance its technology, the company stands poised to shape the future of tokenised finance. Rooz’s vision underscores the shift from theoretical potential to tangible, impactful solutions that simplify asset management, improve operational efficiency, and expand access to financial systems worldwide.