Inside Canton Token Standard V2: Committed Allocations, HTLCs, and Institutional-Grade Cross-Chain Settlement

TL;DR

• Arqitech completed the first Canton Token Standard V2 atomic swaps on live MainNet, exchanging Canton Coin (CC) directly for BTC, ETH, SOL, and TRON with no bridges, wraps, or custodians.
• Cross-chain swaps needed a fix because the old V1 allocation could be withdrawn at any moment, creating a race where one side could pull its funds back after receiving the other side’s asset.
• The committed allocation, a new V2 feature, closes that race by time-locking the Canton side of the trade until a settlement deadline, matching the timelock a public chain provides.
• Every participant signs their own transactions, so private keys never leave the holder, which is what makes the swaps non-custodial and intends to keep existing compliance processes intact.
• For institutions, this opens two-way movement between Canton’s private settlement environment and public-chain liquidity, without the custodial and smart-contract risk of bridges.
• CIP-0112 was approved by the Canton Foundation on June 12, 2026, and stays backwards-compatible with CIP-0056, so older assets keep working; customer availability is set to open in the coming weeks per Arqitech.

Privacy-focused blockchains

Cross-chain settlement between a private institutional network and public chains has long required trusted intermediaries. Canton is a privacy-focused blockchain built for regulated finance, and Arqitech changed that pattern on MainNet, the live production network.

Its Atomic Swap Protocol settled Canton Coin, the network’s native token, against four major public-chain assets in a single all-or-nothing exchange. Each side kept full control of its own assets throughout.

This works due to specific V2 feature: the committed allocation. A committed allocation locks the Canton side of a swap (one “leg” of the two-sided trade) until a defined settlement deadline, matching the timelock assurance a native chain provides.

With this mechanism a private network can settle against a public chain with no intermediary.

For context on reliable participation in networks like this, Everstake offers a white label solution, giving institutions a route to run infrastructure for networks like Canton without managing nodes themselves.

What Token Standard V2 Is (CIP-0112 in Context)

CIP-0112 is a backwards-compatible upgrade to the CIP-0056 token standard, authored by Digital Asset’s Bernhard Elsner and Simon Meier and approved by the Canton Foundation on June 12, 2026. A token standard is the shared rulebook that defines how assets are represented and moved on a network, so different apps and wallets can work together.

Arqitech collaborated on the allocation-lifecycle improvements that make the cross-chain swaps possible.

The purpose is to make one standard fit both TradFi (traditional finance) and DeFi (decentralized finance) settlement venues, plus instuments held through custody chains. This avoids splitting the ecosystem into a separate “crypto” standard and “regulated” standard.

CIP-0056 itself launched as Canton’s counterpart to Ethereum’s ERC-20, the widely used token format, and was approved as Final on March 31, 2025. It defined uniform token APIs covering balances, transfers, transaction history, and atomic Delivery-versus-Payment (DvP) settlement, where the asset and the payment change hands at the same instant or not at all.

CIP-0112 adds four headline capabilities on top of that base. It also preserves full V1 compatibility, so assets can implement both standards:

1. Privacy-enhanced batch settlement for netting debits and credits.
2. The new Account model, giving accountable holdings.
3. Committed allocations, the timelock primitive behind cross-chain swaps.
4. Iterated settlement, allocations that persist across repeated settlements.

Canton Allocations, and Why V1 Wasn’t Enough

An allocation is a Canton’s term for trader’s advance sign-off that a set of assets is ready to be settled by an executor, so the settlement cannot fail for lack of funds. 

The executor is the app or party authorized to carry out the settlement, and the asset owner earmarks specific holdings for one DvP trade.

Under V1, this design included one weakness in swap architecture. A V1 allocation always kept a withdrawable escape hatch, the Allocation_Withdraw command that could allow the sender reclaim the earmarked funds at any time.

That escape hatch is helpful in ordinary (not cross-chain) trades. Since an allocation is only an offer of funds, the sender can change their mind and withdraw before settlement, which protects them if the other side fails to deliver.

For a cross-chain swap, the same feature is fatal. It instigates a race: a withdrawal on the Canton side can beat the settlement, and because the other side of the trade lives on a separate chain, that chain cannot see or stop the withdrawal in time.

It is dangerous if one party takes the asset on the public chain, then pulls its Canton funds back before the trade closes, leaving the counterparty empty-handed.

Committed Allocations: The Timelock That Makes Cross-Chain Work

A committed allocation is a lock that cannot be undone until a settlement deadline, giving the Canton side of a trade the timelock assurance.

When the new committed setting in the allocation is switched on, the party that created the allocation (the authorizer) cannot withdraw the funds until one of four events occurs:

1. The executors settle the allocation.
2. The executors cancel it.
3. The settlement deadline passes.
4. The admin expires the allocation.

settlementDeadline sets the deadline for the lock, and expiresAt is a longer backstop that eventually retires the asset entry if nothing else happens. These two settings line up with the timeout windows for a cross-chain swap to be successful, so both chains agree on when the trade must finish.

This leads to how an HTLC behaves. An HTLC, or hash time-locked contract, is the standard method for swapping assets across two chains without a trusted middleman.

Before the deadline, the locked funds can move only through the executor settling the trade, the executor canceling it, or the registry (the app that issues and tracks the asset) expiring it.

The refund path becomes a true timelock once the deadline passes. At that point the authorizer regains the right to withdraw, so the rule is simple: get the trade done in time, or the funds come back.

Property	Withdrawable allocation (V1 default)	Committed allocation (V2)
Withdraw before deadline	Allowed at any time	Rejected until deadline
Cross-chain swap fit	Breaks the safety of the party who claims second	Native timelock assurance
Main risk	Withdrawal beats settlement	Funds locked if settlement never runs
Enforcement layer	Application-level workaround	Standard-level, enforced by registry

How Canton Executes a Cross-chain Atomic Swap

An atomic swap uses two safeguards, a hashlock and a timelock, so that either both sides settle or neither does.

A hashlock works like a padlock whose key exists but is hidden. One party publishes the padlock (the hash) for anyone to see, but the funds open only when the matching key (the secret, called the preimage) is produced.

Revealing that secret to claim one side automatically exposes it to release the other, which ties the two sides together. If the secret is never revealed, the timelock sends both parties’ funds back after a set timeout.

The committed allocation serves as the Canton side of that structure. It holds Canton Coin in a lock that cannot be undone, released when the executor settles against the revealed secret, with the refund resting on the settlementDeadline if the trade stalls.

Either both sides of the trade complete or neither does, with no half-finished state in between. The single shared secret releases both sides together, and a timeout refunds both together, so no participant is ever left holding a one-sided trade.

What is live today differs from what opens to customers next, so the split is worth stating precisely:

• Live now: MainNet execution is demonstrated. sFOX CEO Javier Martinez cited the first CC-to-BTC swap on Arqitech’s protocol.
• Forthcoming: Arqitech states customer availability opens “in the coming weeks.” Treat this timing as a detail to verify at publication.

The deployment involved four named participants, with Arqitech operating as both validator and protocol operator. Two separate milestones are worth keeping straight: an earlier round on July 23, 2026 swapped CC for USDC and also involved MPCH, Pixelplex, and sFOX, while the later V2 round swapped CC for BTC, ETH, SOL, and TRON.

Why “No Bridges, No Wraps” Is the Whole Point

Removing bridges and wrapped assets removes a large source of risk. A bridge is a service that moves value between two chains, and a wrapped asset is a stand-in token on one chain that represents a real asset held elsewhere.

Both models lean on custodians holding the real asset plus smart contracts that mint the stand-in version, and both layers have been repeated points of failure in past hacks.

Arqitech’s custody claim can be checked in the transaction design itself. Every participant signs their own transactions, whether through an enterprise KMS (a key-management system such as DFNS or Fireblocks that safeguards signing keys) or through their own private nodes.

Validator nodes only prepare and submit already-signed instructions. Keys never leave the holder, which inverts the usual Canton model where signing keys sit inside validator nodes.

Institutions keep their existing processes intact. Compliance and accounting workflows continue unchanged, and settlement stays inside Canton’s privacy environment.

The Supporting Cast: Accounts, Batch Settlement, and Iterated Settlement

V2 adds three more building blocks aimed at developers building on the standard. Readers who only need the swap story can skip this section; the three items expand what a settlement app can do directly on the ledger.

The Account model replaces a bare owner label with a fuller structure of owner, provider, and account id. This supports custody chains, where one party holds assets on behalf of another, plus the creation and destruction of tokens (mint and burn) through special accounts with no owner.

Privacy-enhanced batch settlement arrives through the SettlementFactory_SettleBatch command. It lets an administrator combine multiple debits and credits into one atomic step (netting), with the details visible only to the executors and the parties involved.

Iterated settlement lets a committed allocation stay in place across repeated settlements in a row, so it does not need rebuilding each time. This is the basis for prefunded trading (funds parked in advance so trades clear instantly), on-chain order books, lending, and staking, all without custom contract code for each use.

V2 primitive	What it does	What it enables
Committed allocation	Irrevocable lock to a deadline	Cross-chain HTLC swaps
Account model	Owner + provider + id location	Custody chains, mint and burn
Batch settlement	Atomic multi-leg netting	Multi-asset DvP, tranches
Iterated settlement	Persistent committed locks	Prefunded trading, order books

What This Unlocks for Institutional Settlement

Two-way connectivity between Canton and major public chains, with no third party holding the assets, is the headline result. Arqitech operates as a validator on Canton and now offers a way for value to move in and out (an on-ramp and off-ramp) between the private network and public digital-asset chains.

This fits Canton’s institutional-infrastructure narrative. The network already supports:

• real-world asset settlement,
• tokenized collateral,
• regulated cash.

Cross-chain swaps extend that reach to public-chain liquidity.

As market context, Canton Coin saw a short-term price reaction around the July 30, 2026 launch. Reporting attributed an approximately 3.1 percentage-point move over 33 hours to the V2 atomic-swaps launch, followed by a mild pullback.

Price movement like this is background only and is not a claim about future value.

Institutions running infrastructure across chains often work with established validators to keep uptime and compliance predictable. Everstake provides validator and staking services for institutions and has historically operated 130+ networks to date, which lets teams participate without operating their own node infrastructure.

Open Questions and What to Watch

Four details remain in motion and deserve tracking. The distinction between what is live and what is scheduled will keep changing over the coming weeks.

• Cancellation policy: the community is still clarifying nuance here. The committed flag restricts withdraw, while cancellation by executors remains a separate path.
• Customer general availability: Arqitech’s “coming weeks” timing for customer access should be confirmed at publication.
• Chain and asset coverage: which additional chains and assets follow BTC, ETH, SOL, and TRON is not yet public.
• Migration pace: CIP-0112 sets no V1 sunset, so V1-to-V2 ecosystem migration will proceed gradually.

Conclusion

The atomic swaps are the visible product, and committed allocations are the enabling primitive beneath them. A committed allocation gives Canton a native timelock, letting a private, institutional network settle trustlessly against public chains.

That is the throughline of Token Standard V2. CIP-0112 turned an application-level workaround into a standard-level assurance, and Arqitech’s MainNet swaps of Canton Coin against BTC, ETH, SOL, and TRON are the first working proof.

For institutions weighing participation in networks built on standards like this, dependable infrastructure carries the same weight as the protocol itself. Everstake offers white label solution as a validator and staking provider with expertise in over 130 networks that teams can rely on while the cross-chain settlement layer continues to develop.