Canton, conflict with how ZKsync enforces rules on the blockchain
Banks are operating onchain with competing models that take different approaches to how financial rules are applied.
On the one hand, blockchain-native architects like Matter Labs co-founder Alex Gluchowski argue that financial systems should be implemented across all participants. On the other hand, there are networks built for institutions like Canton, which prioritize privacy, control, and interoperability over global government.
Gluchowski is one of the most vocal critics of the latter approach, which reiterates the limitations of traditional finance. The crux of the criticism is whether rules can be applied to the entire network. This is impossible in a system like Canton, he said.
“But it is possible with blockchains – especially with zero-knowledge systems that are built on public blockchains like Ethereum, which cannot be controlled by any corporate interest, so it is an environment where all parties trust,” Gluchowski told Cointelegraph.
Institutional adoption of crypto is bringing banks and financial institutions on a chain, but it's also dividing the industry along deep fault lines beyond geography or regulation.
What is considered a blockchain?
Canton has gained a lot of attention by targeting privacy and regulatory requirements, connecting banks and asset managers through a network where transactions are shared rather than distributed. The network includes institutional participants such as JPMorgan and Goldman Sachs.
Whether Canton is considered a blockchain depends on how the term is defined and what assets it guarantees.
For Gluchowski, the main feature of blockchain is a single shared ledger that allows rules to be applied to all participants simultaneously. Canton said he was ineligible. The network connects institutions through two-way or three-way connections, with each party directly viewing and verifying the relevant transaction.
“Before blockchain, banks had to enter two-way relationships and define how to handle them through contracts and API interactions,” Gluchowski said. “It's just taking these relationships and workflows and putting them into token form.”
Gluchowski said the Canton model limits what the system can guarantee. While participants can verify transactions in which they directly participate, they cannot independently verify system-wide features such as general resource availability or other system-wide features that apply to all users. Those kinds of guarantees, he added, require a common state that everyone can check.
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“[Gluchowski] It is correct that Canton does not have an international commonwealth, but it is incorrect to say that this will negatively affect Canton's trust model,” digital asset founder Shaul Kfir responded in a shared statement to Cointelegraph.
“In Canton, like in other blockchains, I only trust my own validator and I think that anyone else can be malicious. This ‘don't trust, verify' approach is very different from a distributed API system,” Kfir added.
In Canton's model, trust does not come from a single system-wide view, but from an independent analysis of the transactions involved by each party.
Network regulations conflict with issuer controls.
Following the conversation with Cointelegraph, Gluchovsky participated in a live debate with Yuval Ruz, another co-founder of the digital asset. He reiterated his argument that financial regulations should apply to the entire network within the blockchain network.
Ruse explained that system-wide enforcement does not eliminate reliance on trusted parties, as public blockchain users still rely on token issuers. Ruse pointed to hacks involving assets like the USDC and issuers remain a key enforcement mechanism.
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“Actually, we would have been happier – as we have seen in many crypto spaces, if the centralized issuer intervened sooner than allowing these assets to be traded and exchanged for unauthorized assets, they could not have intervened,” said Rooz.
“In Canton, it's not different from any other public chain, the issuer is centralized in the real world assets, and they have different assets or the same assets as they might have on non-public chains,” he said.
Gluchowski argued that withdrawal limits could be incorporated directly into smart contracts. He said that on networks like Ethereum, activity above a certain threshold could be restricted or require additional approvals, rather than relying solely on the issuer's infrastructure.
“On Canton, you only rely on multisig. On Ethereum, you rely on smart contracts implemented by the network,” Gluchowski said.
“Absolutely not,” replied Rice.
Kfir Gluchowski, whose statement was shared with Cointelegraph after the live debate, said it “confuses the potential of Canton” and how it is used by central RWA issuers.
“When there's a centralized RWA issuer, such as a stablecoin issuer, you trust them with a ‘mint' function, and you and their auditors trust that the on-chain volume is backed by an off-chain backup,” Kfir said.
Competing visions to bring banks onchain
Canton and Matt Labs are competing to solve the same problem of how institutional finance moves through the chain. Matter Labs, the developer of ZKsync, is targeting institutional use cases with Previdium, a model that encrypts transactions and puts zero-knowledge authentication into Ethereum.
Kfir argued that systems like Previdium could threaten trust in a particular area. In his view, users are no longer independently verifying the relevant state, forcing them to reconcile their own records in the event of an operator report being chained.
“ZKsync relies on Prividium operators creating ZKPs, but ZKsync's own open source client does not verify these credentials,” he said. “And even if a user verifies it, it doesn't verify which smart contract logic is running. The user is completely at the mercy of the Pravidium operator.”
Rice made a point during the debate, adding that while Canton has no official certification, there are plans to introduce it in the future.
For now, the split remains unresolved. Canton is built on privacy and institutional control, while ZKsync's Prividium tries to protect those features by tying authentication to a public network. Both claim to offer a viable way to bring banks together, but they are built on fundamentally different assumptions about how financial systems should work.
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