This podcast episode features an interview with Yuval Rooz, co-founder and CEO of Digital Asset. Yuval recounts his experience at Citadel and DRW Trading, and explains the core logic of Canton Network: introducing real-world assets (RWAs) into the on-chain financial system in a compliant and privacy-auditable manner.
The dialogue focused on the long-term value of RWA, the priority implementation of stablecoins and high-quality assets such as US Treasury bonds, the balance between privacy and regulation, cooperation with traditional financial infrastructure such as the US Depository Trust & Clearing Corporation (DTCC), and Canton's differentiated design in governance and token economics models. Yuval emphasized that Canton's goal is not to "tokenize Wall Street," but to "bring Wall Street on-chain," reconstructing a new generation of financial systems on-chain with real assets, compliance, privacy, and institutional-level governance. Canton aspires to become the "New Wall Street" of the on-chain world, rather than just another experimental network in the crypto industry.
The opinions expressed by the guest do not represent the position of Wu Blockchain and do not constitute any investment or financial advice. The audio transcription was done by GPT and may contain errors. Please listen to or watch the full audio and video on platforms such as Xiaoyuzhou and YouTube.
Small Universe: https://www.xiaoyuzhoufm.com/episodes/6959d33914db1df9ef4036a9
YouTube: https://youtu.be/kU6JgyfAu7c
From Citadel and DRW to his experience entering the crypto industry and his motivation for founding Canton
Colin: Yuval, thank you so much for joining us on Wu Blockchain Podcast today. We're also excited to learn more about your personal experiences and the story of Canton Network. As we all know, you previously worked at top institutions like Citadel and DRW, and the community is very interested in those companies and curious about your work experience there, especially the crypto-related aspects, and why you chose to leave those top institutions to found Digital Asset and drive the formation of Canton Network.
Yuval: First of all, thank you very much for the invitation. When I was at Citadel, there was almost no real crypto business in the market, and I mainly worked on risk analysis and risk modeling. Later, I moved to DRW, where I mainly worked on algorithmic trading. Around 2012, a partner at DRW began to persuade the company's founders to seriously study cryptocurrencies. By 2013 and 2014, DRW was quite deeply involved in the crypto space.
I've also been very fortunate to have the opportunity, in addition to trading, to build and lead DRW's venture capital team. The core logic of this investment team is simple: only invest in areas highly relevant to DRW's own business.
I started researching Bitcoin very early on during that period. For example, in 2013 we led an investment in a company that was trying to allow users to buy Bitcoin directly with their credit cards. At the time, this was very cutting-edge and exposed me to a lot of early-stage crypto startups.
At the same time, I was constantly comparing the trading experience across different asset classes. For example, in traditional stock markets, before I left my trading role, latency was measured in picoseconds—you can imagine how fast the trading speed was. But on the other hand, securities settlement was still T+3 at that time, and borrowing securities was extremely difficult. It was under this stark contrast that, around 2013, we began to consider: Is the value of blockchain technology far greater than Bitcoin itself?
These ideas actually began to take shape more than a decade ago. What truly made me make up my mind was in late 2014, when we realized that if we set Bitcoin aside for the time being, this technology itself might have an even greater opportunity than Bitcoin. It was at that point that I decided to leave my previous institution and start the company I am now.
RWA is the most important long-term direction for the crypto industry outside of Bitcoin.
Colin: Privacy and RWA are two very core keywords for Canton, so could you first introduce what Real-World Assets (RWA) are and their relationship with Canton?
Yuval: Looking back at the entire crypto industry over the past decade, my personal view is that Bitcoin remains the only truly unique asset class. It's trying to become a store of value; you could call it "digital gold," but whatever you call it, it's essentially a unique asset class.
Even within the commodities market, there's only one type of gold; there aren't ten thousand different kinds. Therefore, in my view, the same applies to the crypto world: there's only one Bitcoin, and everything else is essentially trying to solve problems "outside of Bitcoin." And this "other thing," in my opinion, is RWA.
In Yuval's view, RWA's ultimate goal is not to create more crypto assets, but to make blockchain a true underlying infrastructure for global finance, enabling capital markets, clearing and settlement, asset issuance and trading to operate in a unified and trustworthy system like Wall Street.
The core of RWA is to make crypto infrastructure truly the financial infrastructure of the future, that is, to use crypto networks to carry and transfer various real-world assets. How to transfer any type of real-world asset on-chain is actually the core logic we established ten years ago.
If the goal is to bring real-world assets onto the blockchain, then a crucial question arises: what conditions are needed for it to truly succeed? This is where privacy comes into play. Our view has always been that if you want real-world assets to be available to both retail and institutional users, privacy capabilities are essential.
To give a simple example, as a successful businessperson, you don't want the whole world to see all the assets in your wallet in real time, right? Citadel is the same; their core intellectual property is what assets they buy and sell. Complete transparency of this information is unacceptable.
Therefore, RWA has always been our most important and top priority opportunity. On-chain privacy is essential for RWA to truly succeed. However, the word "privacy" itself is quite nuanced. The privacy we refer to does not mean non-compliance or lack of regulatory oversight.
In our definition, privacy means that other unrelated trading institutions cannot arbitrarily see your trades and positions; however, if regulatory agencies need to understand your behavior within legal and compliant boundaries, they can still see the trades you have actually made. This kind of "auditable privacy" is what we believe is correct and is the premise for RWA to stand.
Why have stablecoins and US Treasury bonds become the first RWA assets to be launched and the fastest to expand?
Colin: Actually, in the RWA (Responsible Transactional Architecture) field, stablecoins can be considered the first truly meaningful RWA, and a very successful case; the second is probably US Treasury bonds; and then stocks. So, among these areas, which ones is Canton focusing on most? Or will it push forward with all of them simultaneously?
Yuval: If we take a slight step back, let me first introduce the asset types that already exist in the Canton ecosystem today. Currently, Canton includes stablecoins, US Treasury bonds, money market funds, mortgage loans, life insurance, annuities, commodities, structured products, fixed income, private equity funds, and private lending.
Therefore, based on Canton's focus, the answer is essentially "all of the above." However, considering actual implementation and growth rate, I believe stablecoins and US Treasury bonds are the most likely to achieve large-scale adoption the fastest.
The reason is that these two types of assets not only serve as excellent payment tools, but also act as highly efficient collateral management tools in derivatives trading, enabling real-time fund transfers between cash and interest-bearing accounts. Relying solely on these two assets is sufficient to achieve substantial usage, eliminating the need for an overly complex system design from the outset.
Regulatory Differences in RWA in the US and Asia and Possible Paths for Retail Participation
Colin: Most of our audience is from Asia and isn't particularly familiar with the regulatory environment in the US. For example, in Hong Kong, RWA products are generally not allowed to be sold directly to retail users. But you mentioned earlier that Canton's users include both retail and institutional users. So, in the US, can RWA products be sold to retail users? Are there clear regulatory boundaries or guidelines?
Yuval: That's right. We're just building the infrastructure; we're not the direct sellers of assets. However, we can share that there are already several DeFi products on Canton aimed at retail users. Retail users can access the Canton network and directly participate in real-world asset trading.
Our real focus is on how to bring the highest quality assets into this network. For example, just two days ago, we announced a partnership with DTCC in the US. After receiving the relevant letter from the SEC, DTCC chose Canton as the first blockchain network to host real-world assets. This is very important and very exciting.
Essentially, all current efforts in "tokenized stocks" ultimately aim to bring stocks onto the blockchain. DTCC is likely one of the most capable and fastest institutions to truly bring stocks onto the blockchain, given that it manages and holds assets worth over $100 trillion. This also means that Canton is becoming the preferred blockchain platform for Wall Street's core financial infrastructure to migrate to the blockchain, rather than a crypto network detached from the traditional financial system.
Therefore, our strategy is clear: partner with these top institutional players to bring the highest quality assets to the Canton network, and ultimately enable retail users to use and participate in these assets. This is also, in our understanding, a sustainable and compliant path to RWA implementation.
Feasible pathways for Asian investors to participate in tokenized stocks
Colin: Will future crypto investors or retail investors in Asia be able to buy tokenized stocks on Canton?
Yuval: Absolutely. In fact, we've already been working with some securities firms and financial institutions in South Korea, Japan, and Hong Kong to explore how to integrate them into the system we're developing with DTCC. The goal is very clear: to enable these local securities firms to directly offer relevant products to their clients in the future. So, in terms of both direction and execution, this is 100% guaranteed to move forward.
Compliance design and long-term survival under different political cycles
Colin: There's a common concern in the community: everyone knows the Trump administration was relatively friendly to the crypto industry, and some even think that as long as it's not fraudulent, many things can be pushed forward. But if Trump leaves office and a new government takes over, do you think the regulatory environment will change? In particular, will regulations related to RWA and real-world assets become more stringent?
Yuval: That's an excellent and very important question. First, it's important to clarify that we launched Canton during the Biden administration, not the Trump administration. I emphasize this because from the beginning, we wanted this project to have a long-term viability, rather than relying on a single administration or political cycle. Even though we are satisfied with some of the current administration's practices, as you said, it's crucial to ensure the system functions effectively under different governing environments.
That's why we adopted a "fair launch" approach when launching Canton. We didn't do an ICO, nor did we set up any extravagant incentives or allocations for the team. Of course, as the technology provider, Digital Asset itself, like other very early participants, holds a certain number of tokens on its balance sheet, but neither I personally nor my co-founders received any special grants or additional incentives.
At the same time, we have also designed a very rigorous governance structure. The Canton Foundation is chaired by Euroclear and DTCC, which together represent approximately $130 trillion in assets. Digital Asset has only one vote in the foundation, while dozens of other institutions participate in governance within the foundation.
Our core belief is that if you do things right, don't deceive users, and your true goal is to promote financial inclusion and enable more people to access financial tools in a more reasonable and safer way, rather than harming them, then this system has the ability to transcend different government cycles. Even if future governance is completely opposite to the Trump administration, we believe Canton can still survive and continue to grow.
The fundamental difference between Canton and other "tokenized stock" schemes
Colin: Tokenized stocks are really hot right now. Platforms like Kraken, Robinhood, and even Binance and Coinbase are all pushing out tokenized stock-related products, making the competition very fierce. You just mentioned that Canton will also launch a similar product. So, what are the fundamental differences between Canton's tokenized stocks and those on these platforms?
Yuval: Most of the so-called "tokenized stocks" projects on the market right now aren't actually a bad thing; I'm not denying their existence. But it's important to clarify that in these schemes, what you're actually buying isn't the stock itself, but rather a stock derivative.
In other words, you're buying a contract or certificate with a stock as the underlying asset, not actual ownership of that stock. We've seen many similar cases in the crypto industry illustrating the risks that arise when you have to trust an intermediary to "custody" your real assets.
Do you remember the Mantra project? At its peak, it was worth around $8 billion, but it went to zero in a very short time. I'm not saying that these platforms making tokenized stocks will necessarily repeat the same mistake, but the problem is: if you're holding derivatives instead of the underlying asset itself, you have to completely trust that intermediary.
Our core philosophy regarding RWA is that you should be holding the actual securities themselves, not their derivatives. Most solutions on the market essentially require you to trust a third party in an unseen account to hold those stocks on your behalf.
Canton aims to do something entirely different. Our goal is that if you hold an Apple token on-chain, you are a truly recognized Apple shareholder in Apple's official shareholder register or registration system. You are not holding a derivative, but directly holding Apple stock. Similarly, if you hold US Treasury bonds on Canton, you are holding real US Treasury bonds themselves.
This is the fundamental difference. Besides that, there's another very important point: privacy. You've probably seen in many news reports how retail users are exploited and systematically exploited by large institutions when a blockchain lacks privacy protection.
Our view is that only by simultaneously achieving "real-world asset on-chain" and "privacy protection" on the blockchain can we provide retail users with a truly good user experience and sufficiently strong user protection. Both are indispensable.
If existing solutions are more about replicating certain financial products from Wall Street on-chain, then what Canton wants to do is to completely move Wall Street itself, including its assets, rules, governance, and trust system, onto the blockchain, building a truly meaningful "New Wall Street on Chain".
Balancing Privacy and Regulation: Opposing Anonymity, Supporting Auditable Privacy
Colin: For many crypto-native users, privacy is almost paramount, which is why they prefer DeFi over centralized exchanges. However, from a government and regulatory perspective, they generally don't favor "privacy." In this context, how can a balance be struck between privacy and regulation?
Yuval: Let me start with something that might seem counterintuitive: in reality, there is almost no privacy in today's crypto world. And for the past decade, the crypto industry as a whole has been "anti-privacy." Often, the crypto community even treats privacy as a bug rather than a feature.
Think about it. I might not know if you're using a certain address, but I can see all the assets and transaction records in that public wallet. That's not true privacy. Simply not knowing who's behind an address doesn't equate to privacy. Because what happens in reality? As you know, when a large amount of Bitcoin is transferred from an address to an exchange, the market often immediately starts selling off, because everyone knows this likely means a sell-off is imminent.
Therefore, privacy is practically nonexistent in the crypto market; instead, it's rife with upfront transactions and information asymmetry. The recent events on Pump.fun are essentially direct consequences of the lack of privacy protection.
For us, privacy is a core prerequisite for doing things right. The problem is that if privacy is poorly designed, regulators might argue that the blockchain not only protects ordinary users from upfront transactions and malicious behavior, but also provides cover for bad actors, allowing them to commit crimes undetected. This is precisely where the balance needs to be struck.
The core issue is: how to provide "good privacy," rather than giving bad actors tools to abuse. This is why I've consistently emphasized the distinction between "privacy" and "anonymity." In my view, what governments truly oppose is anonymity, not privacy. In fact, regulatory agencies don't oppose privacy; in many situations, they even support it. For example, when you see a doctor, they cannot disclose your medical information without your permission—this in itself is a protection of privacy.
The key difference is that you need a privacy mechanism where, under normal circumstances, transaction and asset information is invisible to unrelated parties; but once regulatory agencies or law enforcement need to investigate certain suspicious activities in a legal and compliant manner, they can audit and trace them. It's not real-time monitoring, but "auditable when necessary."
This is precisely the capability Canton offers: protecting ordinary users from being targeted and exploited by malicious actors while granting regulatory agencies auditing authority when necessary. We believe this represents the most reasonable balance between privacy and regulation.
Why are traditional banks willing to participate in the Canton ecosystem?
Colin: I noticed that Canton has many large banks among its investors. This is quite rare in the crypto industry. Traditionally, banks aren't considered "friends" of the crypto industry, especially given the previous regulatory environment in the US, or even more so in Asia. So why has Canton attracted so many banks? Will these banks still have reservations about the crypto industry now?
Yuval: I might answer this question from a slightly different angle first, and then talk specifically about banks. I think there's a prevailing notion in the crypto industry that the goal of crypto is "disintermediation." But in my view, what technology should really be doing is eliminating those intermediaries that don't help the world and only add complexity.
If you take a close look at today's crypto ecosystem, you'll find intermediaries everywhere: there are crypto custody institutions, crypto exchage, and even many DeFi teams themselves act as intermediaries.
For example, if you rely entirely on a single DEX to complete all your transactions, and that DEX decides to modify its code and change its rules tomorrow, you don't really have much of a choice. Most users also can't simply say, "Then we won't use you anymore, we'll switch to our own rules." From this perspective, the crypto world hasn't eliminated intermediaries; it has merely replaced the old intermediaries with new ones.
These new intermediaries are essentially no different from banks; they also exist to make a profit. Therefore, technology will not naturally eliminate intermediaries; it should only eliminate unnecessary, inefficient, and user-unfriendly intermediaries.
Returning to the issue of banks, I believe the core obstacle they face isn't just the attitude of a particular government, but rather a set of principles championed by the early crypto industry: such as "privacy is bad" and "complete permissionlessness is the right approach." Within this framework, even if banks wanted to participate, it's practically impossible.
Imagine you're using HSBC. If one day you open hsbc.com and can see everyone's account information, and anyone can open an account without KYC or AML, that's completely impossible in the real world. HSBC is a strictly regulated bank; it cannot provide financial services without compliance and privacy boundaries.
So the problem isn't that banks are unwilling to participate in the crypto industry, but rather that under the existing crypto framework, they simply had no possibility of participating.
What Canton offers is precisely this capability: enabling banks to participate in the blockchain and crypto ecosystem while fulfilling their compliance obligations, being accountable to their clients, and meeting regulatory requirements. This is the key difference, not a change in the banks' attitudes themselves.
Risk Management Issues and Sources of Systemic Risk in the Crypto Industry
Colin: I remember you mentioned before that you have a background in risk management. What are your thoughts on risk management in the crypto industry? Do you believe that crypto startups or some leading crypto institutions are not doing a good enough job in risk management?
Yuval: I believe that, like any emerging financial instrument, the crypto industry will inevitably have participants who do a good job of risk management, as well as those who don't. The reality is that there are actually many excellent risk management talents in the crypto industry, but you won't hear their names when things are going well, because they are precisely the ones who have managed things well.
The real issue is that you don't actually need a lot of people who are bad at risk management; just a few, but large enough, are sufficient. Overall, I actually believe that most institutional crypto participants are quite professional in risk management.
The problem is that, if you recall the Terra Luna and Three Arrows Capital incidents, it doesn't actually require the entire industry to make mistakes in risk management; just a few firms that significantly increased leverage and took on excessively large positions during a market uptrend are enough. Once the market trend reverses, these models and judgments, originally based on the assumption of an upward trend, will all become invalid in a very short time.
There's another point many people might be reluctant to admit: while the crypto market is often perceived as highly mature and complex, this isn't actually the case. The industry is still in its very early stages, and there's a long way to go in terms of efficiently transferring liquidity, managing collateral, and building more robust risk control mechanisms into the system.
Therefore, when the market begins to decline, it is often the one or two layers, a very small number of highly leveraged participants, who use illiquid assets as collateral, such as using Bitcoin to support other risky assets, that ultimately trigger a chain reaction and cause a systemic shock.
Of course, I don't believe we should condemn the entire industry. To use a common American saying, don't throw the baby out with the bathwater. I don't think the entire crypto industry is bad at risk management; a more accurate statement is that there are indeed some "cowboy-type" players in the industry who are overconfident and believe they are smarter than everyone else. And because the industry itself is still young and rapidly developing, it is precisely the behavior of this small group that is enough to have a huge impact on the entire industry.
Canton's token economics and "application-first" incentive design
Colin: Could you please give us an overview of Canton’s plans for the coming year, such as a roadmap or what the most important things are?
Yuval: Of course. I'd also like to add to Canton's design regarding token economics. When you observe the token economic models of many current blockchain projects, you'll find that those who are ultimately incentivized and rewarded are often the validators.
Look at Ethereum. Who takes the majority of the transaction fees? Validators. The same goes for Solana; the fees primarily go to validators. But if you think about it carefully, who truly creates value for the network? In my opinion, it's protocols like Aave and Uniswap, and all the teams that actually build the applications. They're the ones who generate users, transaction volume, and all the fees on the network. In other words, it's the developers—those who truly invest a lot of time and effort in building their products and persuading users to use their applications. But the reality is, they don't directly receive corresponding benefits from the success they bring to the network.
In my opinion, this is why you see so many teams choosing to build their own Layer 2 platforms. They ask a very real question: if I own the users and the financial products, why should I hand over all the fees to someone else? It's like creating a podcast and giving all the advertising revenue to a third party—it clearly doesn't make sense. You've incurred all the costs of content creation, recording, and operation.
I believe this is a mistake many Layer 1 developers make when designing token economics: they give the vast majority of incentives to infrastructure providers.
Canton's approach is different. This is actually very similar to the early development of the internet. When the internet first appeared, the most attractive and popular companies were those that sold routers and switches, such as Cisco. They were crucial; without these companies, there would be no internet. But once the internet became truly widespread, the focus shifted from these infrastructure companies to those that directly faced users and controlled user relationships, such as Google and Tencent.
Canton employs a similar logic. By the end of this year, we will experience a process similar to a "double halving," where infrastructure providers will have a smaller and smaller share of the overall token economy, while more incentives will be allocated to the application layer. If you build a very successful application on Canton, we believe you deserve the majority of the network's economic rewards. This is crucial for us.
As you can see now, more and more developers are trying to solve this problem because they are starting to feel frustrated: they are doing all the dirty work, but the rewards are going elsewhere. Many Layer 2 projects claim to be part of the Ethereum ecosystem, but in reality, their reason for building L2 is to keep the fees within their own system instead of continuing to pay them.
This is one aspect of Canton that has already been implemented and proven effective. As for what we will do in the coming year, our mission remains very clear: to truly bring Wall Street onto the blockchain, rather than simply "tokenizing Wall Street." Canton's goal is to build a new generation of Wall Street on the blockchain that can operate long-term and be used by global institutions and retailers.
Next, we will focus on expanding and scaling our infrastructure, introducing more asset types and DeFi protocols. Simultaneously, the Canton Foundation will provide grants to developers who wish to add new features to the network, allowing them to directly participate in the development of the underlying code and functionality.
For us, the most important thing in the next phase is to drive real-world use cases and practical utility. We hope that by the end of next year, Canton will become the number one blockchain in the "no on-chain fees" system. We are currently roughly in the top ten, and our goal is to enter the top three next year, or even become number one.
