Banks operating on different blockchain networks have gained a new way to coordinate securities settlements, currency exchanges and collateral transfers following the launch of Consensys’s Sovereign Network Interoperability platform.
Summary
- Consensys has introduced Sovereign Network Interoperability, allowing financial institutions to coordinate transactions across separate blockchain networks.
- Banks can settle tokenized securities, exchange currencies and transfer collateral without moving assets from their original ledgers.
- The technology uses Consensys’s Cross Ledger Interoperability Protocol (CLIP) to coordinate and verify transactions.
- Ethereum-compatible networks are available now, while connections to Canton and additional protocols remain planned.
- The announcement follows Consensys’s October partnership with ClearToken and its planned separation from MetaMask.
Unveiled at Devcon in Mumbai on November 2, the new system lets institutions complete transactions across independently operated ledgers while keeping their assets and records within their existing networks.
Consensys is targeting banks, custodians, asset managers and financial market operators that use separate digital systems for payments and securities transactions. The company said its software would handle transaction routing, coordinate settlement and track each transfer through completion.
Consensys offers banks a way to connect separate networks
A bank using one blockchain may need to exchange assets with another institution operating on a different network. Connecting those systems normally requires additional software and agreements governing how transactions are completed.
Consensys’s offering brings several interoperability tools into one supported product, allowing institutions to establish connections without replacing their existing ledgers.
At the center is the Cross Ledger Interoperability Protocol, or CLIP, which coordinates transactions and uses cryptographic verification to confirm activity across participating networks.
The technology follows a design Consensys calls bridgeless interoperability. Assets remain on their original ledgers instead of moving into separate representations created by blockchain bridges.
Institutions still determine which counterparties can participate, what information they can access and which transactions they may authorize.
David Cunningham, president of Consensys, said financial institutions need to connect with counterparties “without sacrificing privacy, while keeping control of their infrastructure.”
“We are bringing deep protocol expertise, transaction coordination and complete support into one product,” Cunningham said.
The company maintains the software integrations, monitors connected systems and provides technical support when networks introduce changes.
Banks can settle securities and exchange currencies
The software covers four financial activities, beginning with securities settlement and wholesale currency payments.
In securities trading, a bank could transfer ownership of a tokenized security on one ledger while another institution makes payment on a separate network.
Consensys said the arrangement would use delivery-versus-payment, a process that links the delivery of securities with the corresponding transfer of funds.
Currency transactions would follow a similar approach. Banks could coordinate two different currencies under payment-versus-payment conditions agreed before settlement.
The platform covers collateral transfers involving clearinghouses and approved counterparties, including arrangements where financial institutions need to provide eligible assets.
Fund servicing represents another application. Corporate treasurers could move unused cash into tokenized money market funds and redeem those holdings outside conventional banking hours.
For each transaction, participating institutions submit their requirements through an interface connected to their existing applications. The system then selects an approved route and coordinates the necessary actions.
Consensys said its technology can report completed transactions, failures or situations requiring further intervention.
Ethereum networks are available as Canton support remains planned
The company confirmed that Ethereum Virtual Machine-compatible networks can use the platform now, while Canton connectivity is expected later.
Its plans include support for the Ethereum Economic Zone standard and the Inter-Blockchain Communication protocol.
In September, crypto.news reported Cosmos’s institutional network plans, which involve helping banks connect blockchain systems through IBC.
Consensys said institutions could operate its product themselves, work through a financial market infrastructure provider or select managed services.
The company will provide compatibility testing, software updates, security fixes and recovery procedures for supported connections.
It has not disclosed pricing, transaction volumes or the names of institutions using the new offering in production.
The announcement did not establish a timetable for Canton integration or identify the first customers expected to use cross-ledger settlement services.
Launch follows ClearToken deal and MetaMask restructuring
Consensys announced a partnership with ClearToken on October 8 to develop infrastructure for round-the-clock settlement of tokenized securities and cash.
The arrangement combines Consensys’s blockchain technology with ClearToken’s work on regulated clearing and settlement services.
ClearToken CSD Limited has received conditional approval under the Bank of England’s Digital Securities Sandbox, while the group’s proposed central counterparty services require further authorization.
Other institutions have been developing comparable connections. In September, Chainlink connected banks to Swift’s blockchain ledger through a system that lets participating banks retain control of transaction-signing keys.
Consensys is pursuing its institutional business while preparing to separate MetaMask from its blockchain infrastructure operations.
The company announced that separation in September, with MetaMask set to operate independently under Joe Lubin.
A newly formed Consensys company will retain the protocol and institutional infrastructure businesses under CEO Mike Kriak and President David Cunningham.
The company expects to complete the corporate separation before the end of 2026.
