Canton Founder: ‘Public Permissionless’ Was a Huge Mistake | Yuval Rooz

Summary

Yuval Rooz argues that institutional blockchain adoption depends less on being “public and permissionless” in the purest sense and more on enabling real financial businesses to operate on shared infrastructure while retaining privacy, controls, and asset-level sovereignty.

Business strategy and operating playbook

• Sell to the P&L owner, not just the innovation lab. Digital Asset may engage with bank innovation teams to explain the technology, but Rooz says production decisions belong with business leaders who own revenue or costs. Projects are more likely to launch when tied to a clear business outcome.
• Build for regulated institutions’ requirements. Rooz says Canton was designed around privacy, risk controls, fiduciary duties, and issuers’ ability to control their own assets and records. He argues that infrastructure suitable for banks can also support broader use cases.
• Make participation public without making every transaction public. Rooz rejects the idea that public networks must expose all activity or give everyone unrestricted access. He argues that permissionless systems already have practical limits, such as costly node operation, freeze controls, or security councils with the power to reverse transactions.
• Move the business itself on-chain—not just the asset’s distribution. Rooz distinguishes native on-chain operations from issuing a token that represents an asset while its underlying records, processes, and services remain off-chain. He sees end-to-end on-chain activity as the larger opportunity.
• Treat network participation as the moat. Rooz argues that institutional users will gravitate toward networks where counterparties, liquidity, and relevant market infrastructure already operate. Adoption can reinforce itself as more participants and use cases join.
• Design for sovereignty and interoperability. Canton’s “sovereign cantons” concept allows participants to set their own rules and choose whether to connect. Rooz presents this as a practical response to regulatory and geopolitical differences, rather than assuming the world will use one ledger.

Examples and product applications

• Repo: Rooz cites Broadridge’s repo activity on Canton as an example of a financial business operating natively on-chain.
• Equities: He discusses DTCC/DTC activity involving equity tokenization and the possibility of using Canton for 24/7 create-and-redeem processes.
• Derivatives: Rooz says Canton was due to record its first print of an uncleared derivative, with Canton serving as the books and records and variation margin managed on-chain. He describes the product as part of a market worth more than $100 trillion, with around $250 billion in daily notional trading.
• Stablecoin reserves: Rooz argues that stablecoin issuers generally use blockchains for token distribution while running the underlying business off-chain. He sees on-chain Treasury holdings and reserve management as a way to bring more of that operation on-chain.
• After-hours equity dislocation: Rooz describes tokenized or wrapped equity products whose creation and redemption depend on traditional market hours. When retail demand rises after hours and supply cannot adjust, the product can diverge from its underlying asset. He cites an instance where a product was discussed as trading at a 200% premium, followed by retail losses when market makers created more supply at the market open.
• Asset control: Rooz says Canton is designed so an issuer retains control over its asset and no third party can change its books and records without the issuer’s explicit approval. He contrasts this with networks where security councils or post-hack interventions can alter ledgers.

Metrics, milestones, and outlook

• The interviewer refers to a $355 million raise. Rooz says many institutional supporters were already working with Digital Asset and describes A16Z Crypto as an exciting addition to the company’s cap table.
• Rooz estimates institutional willingness and eagerness to move on-chain at 7–9 out of 10, but actual movement at only 0.5–1 out of 10—a gap he views as an adoption opportunity.
• Digital Asset had focused on capital-markets blockchain use cases for roughly 12 years. Rooz says the company acquired digitalasset.com in 2014.
• Rooz notes that Shinhan, which he describes as Korea’s largest bank, had recently become a significant Canton validator.
• Looking toward 2027, Rooz expects investors to favor projects that generate measurable utility and value rather than relying solely on token speculation. He also flags the scale of AI investment as a potential macroeconomic risk if expected results fail to materialize.
• Rooz says Canton’s design anticipates a world of multiple connected networks shaped by sovereignty and geopolitics, rather than a single global ledger.

Presenters and source

• Yuval Rooz — Co-founder and CEO of Digital Asset; creator of Canton Network.
• Sean Lee — Host of Onchain Capital.
• Source: Onchain Capital, recorded during Korea Blockchain Week.