As Bitcoin emerges as a secure and liquid digital asset, financial institutions are increasingly recognizing its potential beyond a simple store of value. The challenge has been unlocking Bitcoin's broader utility across financial markets in the form of collateral while adding the privacy and controls essential for regulatory compliance. This represents a pivotal shift for capital markets, where institutions seek to leverage Bitcoin's unique properties—global 24/7 trading, deep liquidity, and scarcity—within their existing operational frameworks.

With the recent news that CBTC is now live on Canton Network, this opens up transformative opportunities for institutional Bitcoin holders. Developed by BitSafe, CBTC represents a 1:1 Bitcoin-backed asset designed specifically for financial institutions, combining privacy, finality, and—importantly—aligned economic participation that traditional wrapped tokens cannot provide.

Putting Your Bitcoin to Work

On the Canton Network, the first privacy-enabled public blockchain, Bitcoin can now serve as collateral for a range of financial activities, including margin flows, trading, and liquidity management.

CBTC, built by BitSafe using decentralized attestation nodes like Kiln and Figment, provides a 1:1 backed wrapper that bridges Bitcoin to Canton's smart contract framework without intermediaries or custody risks. This development addresses a core challenge in institutional finance: deploying Bitcoin in regulated workflows where transparency and auditability must remain balanced with privacy requirements.

Canton's configurable privacy ensures transactions remain private between counterparties while maintaining an immutable audit trail, reducing counterparty risk and accelerating settlement times from days to seconds. As a secure, liquid, and programmable digital asset, CBTC brings Bitcoin's core strengths - global 24/7 trading and deep liquidity - into a form usable across regulated financial applications. Its interoperability on Canton enables it to function as effective collateral within institutional workflows, unlocking yield opportunities typically inaccessible in traditional fiat systems.

"The depth and liquidity of Bitcoin markets today have driven its maturation as a form of collateral or asset to lend against," said Eric Saraniecki, Co-Founder of Digital Asset. "Asset tokenization on Canton is about unlocking real utility by enabling highly liquid assets to be transferred directly, but always with the privacy and control institutions demand. This includes the ability to confidently and safely use BTC within the ecosystem for margining and beyond."

BitSafe: Building the Bridge for Institutional Bitcoin Integration

BitSafe leverages trusted validators to ensure decentralized custody, fast minting/burning, and credential-based access - minter credentials for bridging operations and holder credentials for utilization. Fees are transparent and aligned with economics shared among participants to foster ecosystem growth.

This positions BitSafe as a key builder in Canton's network, extending Bitcoin's utility while upholding the highest standards of security and compliance. Early adopters are already exploring CBTC through credentials, paving the way for broader institutional Bitcoin integration.

How CBTC Works Technically

CBTC operates through a decentralized model where attestation nodes verify the 1:1 backing of wrapped Bitcoin tokens. This eliminates centralized intermediaries, reducing risks compared to models like wBTC on Ethereum. Institutions mint CBTC by locking native Bitcoin, enabling seamless use in Canton's smart contracts for tokenized finance applications. The process ensures full auditability while preserving privacy, making it ideal for regulated environments.

Future Use Cases: Driving Efficiency in Tokenized Finance

Looking ahead CBTC is uniquely positioned to play a role in unlocking BTC utility across collateral mobility use cases, including in projects being delivered on the Canton Network.

Collateral for OTC and Exchange Driven Derivatives and Margin Flows

Institutions can post CBTC as initial or variation margin in privacy-protected bilateral or exchange based trades. Through Canton’s unique privacy feature, assets can be posted and withdrawn as collateral in real time to support automated, intraday margin management while maintaining confidence that collateral movements cannot be viewed by the wider world.

Repo and Treasury Operations

The ability to use CBTC for short-term financing and intraday liquidity, convertible with tokenized real-world assets (RWAs) and stablecoins to enable T+0 repos and all without bridging vulnerabilities. This aligns with BIS reports on next-gen monetary systems projecting $10 trillion in tokenized settlements by 2026. Recent Euroclear and DTCC pilots demonstrated up to 90% reductions in settlement risk and the ability to unlock other high-quality tokenized assets, from sovereign bonds to Gold, for instant use as collateral on Canton.

Bitcoin-Backed Lending and Yield Strategies

Diversify loan portfolios by accepting CBTC as collateral, hedged via on-chain options or vaults. As highlighted in World Economic Forum analyses, tokenized collateral enhances secondary market liquidity with 2-3x efficiency gains.

Cross-Chain Interoperability with Stablecoins

Pair CBTC with tokenized cash for hybrid yields, supporting AI-optimized risk models in volatile markets. Per Visa and Santander forecasts, stablecoin / Bitcoin blends will continue to drive institutional DeFi adoption through 2025.

These use cases reflect Canton's forward-thinking approach, drawing on collaborations with leading market participants like Goldman Sachs, Bank of America, , and Nasdaq to responsibly scale tokenized finance.

Ecosystem Quotes

“Our contribution to the Canton Network is providing foundational infrastructure for CBTC. By operating the decentralized bridging software, we perform the critical role of attestation, ensuring the integrity and 1:1 backing of Bitcoin collateral. We're not only securing the network as validators, we're actively operating the bridge that brings Bitcoin into Canton’s regulated, privacy-first ecosystem.”

– Alvin Su, Chief Commercial Officer of Nethermind

“Launchnodes is excited about supporting BitSafe as a validator on Canton because it enables Bitcoin to function within institutional grade workflows - specifically for institutional trading, derivatives, and settlement, enabling firms to deploy Bitcoin as collateral or settlement currency. This is grown-up functionality for wholesale financial services businesses and it is very useful.”

– Jaydeep Korde, CEO of Launchnodes

Institutions interested in CBTC can apply for credentials at https://form.typeform.com/to/esAv2IQz to unlock Bitcoin's potential in your institutional portfolio.

About BitSafe

BitSafe builds secure infrastructure and solutions that enable institutions to put their Bitcoin to work. As the institutional Bitcoin infrastructure protocol, BitSafe bridges the gap between traditional finance and Bitcoin DeFi, providing comprehensive capabilities spanning privacy-enabled transactions, regulatory compliance frameworks, and curated yield strategies. By safeguarding assets with audited technologies and comprehensive risk disclosures, BitSafe ensures informed decision-making while making Bitcoin infrastructure accessible through familiar, institutional-grade approaches.

Website | Twitter (X) | LinkedIn | Telegram

About Canton Network

The Canton Network is the only public blockchain in the financial industry with on-chain privacy essential to the seamless movement of assets and capital on decentralized open rails. With over $4 trillion in tokenized assets on-chain, its proven institutional-grade scale synchronizes previously siloed systems with the configurable privacy and controls required to unlock asset mobility across TradFi and crypto ecosystems. Launched in July 2024, the public infrastructure is governed by the Global Synchronizer Foundation and supported by the Linux Foundation to ensure organizational neutrality and foster innovation across the ecosystem.