The institutional adoption of real-world assets (RWAs) is creating a divide between public and permissioned networks, exposing a gap between the liquidity advantages of blockchains like Ethereum and the privacy requirements driving systems like Canton Network.
The divergence is becoming more pronounced as tokenized assets gain popularity among mainstream asset managers.
Marcin Kaźmierczak, co-founder of blockchain provider Oracle RedStone, said product development will likely take place on public blockchains, while permissioned systems are better suited to institutional processes that require confidentiality.
“There are some operations between institutions that simply need to remain private, and that is the value proposition that Canton offers very effectively,” Kaźmierczak told Cointelegraph.
Digital Asset’s Canton Network enables banks and asset managers to tokenize and settle risk-weighted assets, while keeping transaction details perceptible only to the parties involved. The network claims it processed $6 trillion in RWA in 2025.
Instead of focusing on a single architecture, banks and asset managers are building parallel systems designed to perform different functions within the tokenized financial stack, Kaźmierczak says.
The Ethereum merger was Wall Street’s moment of tokenization
Tokenization has become one of the main narratives behind the institutional adoption of blockchain beyond spot cryptocurrency exposure and ETFs.
In June 2024, McKinsey estimated that tokenized assets could reach approximately $2 trillion by 2030. More bullish projections include much higher projections, including a target of $30.1 trillion by 2034. set by Standard Chartered and Synpulse.
Regulatory transparency in the US has contributed to this change. The GENIUS Act, passed in 2025, created a federal framework for stablecoins that serve as a settlement layer for many tokenized assets.
Kazmierczak said confidence in Ethereum started improving earlier, after the network transitioned to proof of stake in 2022.
“In 2022, when I talked to institutions, the Merger was a big question mark for these institutions,” Kaźmierczak said. “They saw it working without any glitches, so that gave them confidence.”
Kaźmierczak claimed that RWA projects among institutions started in 2023 or 2024, but because institutions work with annual budgets, the development and launch of projects does not occur within weeks or months as is the case with cryptocurrencies. This led to the creation of a cluster of institutions announcing tokenization projects last December, he said.
“It’s not like they started in the fourth quarter of last year. No, they started a year earlier and now we’re seeing the fruits.”
Currently, over $26.4 billion worth of RWA tokens utilize blockchains as distribution layers, of which over $15 billion is on Ethereum. It also has the most liquidity as a veteran in the shrewd contract space, with over $160 billion in stablecoins.
Related: Why institutions still prefer Ethereum despite faster blockchains
Banks divide their activities into public and private networks
Institutions separate market activities from internal operations. On the one hand, public blockchains provide liquidity, composability, and access to decentralized finance (DeFi) strategies such as lending and tokenized vaults. On the other hand, permissioned networks are preferred for settlement processes, bilateral transactions, and internal asset management workflows that cannot be exposed on open networks.
Systems like Canton enable financial firms to automate these processes while limiting transaction details to counterparties. This structure is closer to existing established financial infrastructure (TradFi).
This division suggests that institutional adoption of blockchain may not be focused on a single network model. Instead, financial firms appear to be building a parallel infrastructure that includes public networks that handle liquidity and licensed systems that support operational processes behind the scenes, Kaźmierczak says.
“There are some operations between institutions that just need to remain private, and that’s a value proposition that Canton offers very effectively. That’s why we want to be on both feet,” he said.
From the very beginning, several vast financial institutions were involved in the Canton Network. Digital Asset and a consortium of companies including Microsoft, Goldman Sachs and Deloitte announced the launch of the network in May 2023. In September 2024, Digital Asset and Depository Trust & Clearing Corporation completed the pilot of the US Treasury Collateral Network in Guangzhou.
According to According to RWA.xyz, the Canton Network has over $313 billion of RWA tokens represented, referring to assets that utilize blockchain as a record-keeping layer.
Related: Privacy tools are gaining popularity thanks to institutional adoption, says ZKsync dev
ZK evidence and permitted privacy
One of the clearest distinctions between these two institutional paths lies in how privacy is achieved. While many blockchain projects strive to maintain confidentiality using cryptographic tools such as zero-knowledge (ZK) proofs, Canton relies on consent-based data sharing, where transactions are perceptible only to the parties involved.
Not everyone in the industry agrees that this is the most powerful model. Matter Labs CEO Alex Głuchowski he said in a social media exchange with Digital Asset’s Yuval Rooz that ZK systems strengthen blockchain security by requiring cryptographic evidence that any state change complies with the protocol’s rules. Even if operators or administrators are compromised, attackers will not be able to enter invalid transactions into the ledger without generating a valid proof of execution.
Rooz in a blog post entitled he claimed that completely non-transparent implementations of CC systems may make it hard to audit activities on financial markets. If transaction data is completely hidden, errors or fraud can go undetected, potentially reproducing the “black box” conditions that once made corporate scandals like Enron’s possible.
As Kaźmierczak noted, the dispute highlights a broader architectural issue regarding the institutional adoption of blockchain.
Financial companies are experimenting with different approaches to balancing privacy, verifiability and control. Public networks continue to support market-oriented liquidity and DeFi activity, while licensed systems replicate institutional processes requiring confidentiality, creating parallel rails for the tokenized financial system.
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