Custodian Service
Overview
The Custodian Service automates the approval and processing of tokenized collateral operations on the Canton Network. It enables your organization to efficiently manage digital assets while maintaining control, compliance, and oversight.
What is the Custodian Service?
Think of the Custodian Service as an intelligent automation layer between your users and the blockchain. It continuously monitors for incoming requests and automatically processes approvals according to your organization's policies.
The Business Challenge
Traditional custodian operations require manual review and approval of every transaction:
❌ Time-consuming manual processes
❌ Operational bottlenecks during peak periods
❌ Increased risk of human error
❌ Limited operating hours
The Solution
The Custodian Service automates these workflows:
✅ 24/7 automated monitoring and processing
✅ Instant approval of compliant transactions
✅ Consistent policy enforcement
✅ Complete audit trail
✅ Integration with your existing systems
How It Works
Simple Four-Step Process
1. User Request: Your clients submit requests through Canton, such as tokenizing or transferring an asset or processing bond coupons.
2. Automatic Detection: The service monitors the blockchain and immediately detects new requests requiring your approval as custodian.
3. Policy Validation: The service validates each request against your organization's approval policies and connects to your external systems (risk management, compliance, etc.) for verification.
4. Automatic Execution: Once validated, the service automatically approves and executes the operation on the blockchain. Your clients see results in real-time.
Example Scenario: Collateral Transfer
Without automation, this same process might take hours or even days with manual review.
Custodian Workflow Diagram
Key Points:
Automated Detection: Service continuously monitors the blockchain without manual intervention
External Integration: Connects to your existing risk and compliance systems for validation
Multi-Party Security: Requires both client and custodian signatures for operations
Real-Time Updates: Clients see results immediately after approval
Key Benefits
Operational Efficiency
Reduce Manual Work
Eliminate repetitive approval tasks
Free up staff for high-value activities
Scale operations without adding headcount
Faster Processing
Near-instant approval for standard requests
24/7 availability
No operational delays or backlogs
Risk Management
Consistent Policy Enforcement
Rules applied uniformly to all transactions
No exceptions without explicit authorization
Reduced operational risk
Enhanced Controls
Integration with existing risk systems
Real-time compliance checking
Automated limit monitoring
Transparency & Audit
Complete Visibility
Every request logged and tracked
Clear audit trail for regulators
Real-time monitoring dashboards
Regulatory Compliance
Maintain records of all approvals
Demonstrate consistent policy application
Support regulatory reporting requirements
Cost Savings
Lower Operating Costs
Reduce manual processing expenses
Minimize settlement failures
Decrease error-related losses
Improved Client Experience
Faster service delivery
Reduced friction in operations
Enhanced competitiveness
Configuration & Policies
Setting Your Approval Rules
The service could be configured to match your organization's risk appetite and compliance requirements:
Amount-Based Rules
Auto-approve transactions under specified thresholds
Escalate large transactions for manual review
Apply different limits by asset class or client type
Party Whitelists
Pre-approve transactions with known, trusted counterparties
Automatic KYC/AML verification
Blocklist screening
Time-Based Rules
Restrict operations to business hours if required
Apply different rules for regular vs. off-hours transactions
Holiday and weekend handling
Multi-Level Approval
Route high-risk transactions to senior approvers
Escalation workflows for exceptions
Maker-checker controls where needed
Integration with Your Systems
The service connects with your existing infrastructure:
Risk Management Platforms
Real-time limit checking
Concentration risk monitoring
Counterparty exposure tracking
Compliance Systems
Sanctions screening
Transaction monitoring
Regulatory reporting
Treasury & Operations
Collateral availability verification
Cash account integration
Settlement instruction generation
Monitoring & Oversight
What You Can See
Real-Time Activity Dashboard
Current request queue and processing status
Volume metrics by operation type
Processing time statistics
Exception and error tracking
Audit Reports
Complete transaction history
Approval decision records
Policy violation alerts
Regulatory reports
Performance Metrics
Request volumes and trends
Approval rates by category
Processing time analytics
System health indicators
Oversight Controls
Management Reporting
Daily/weekly/monthly activity summaries
Exception reports for management review
Trend analysis and capacity planning
Risk exposure reporting
Alert Configuration
Unusual activity notifications
Threshold breach alerts
System error notifications
Compliance violation warnings
Getting Started
Implementation Overview
Your organization's technical team will work with our support to:
Connect the service to your Canton Network environment
Configure your approval policies and system integrations
Test with sample transactions in a safe environment
Deploy to production with monitoring and support
Optimize based on real-world usage patterns
Support & Resources
Future Capabilities
We're continuously enhancing the service with new features:
Coming Soon
Advanced analytics and reporting dashboards
Machine learning-based fraud detection
Enhanced multi-custodian coordination
Additional asset class support
On the Roadmap
Visual workflow designer for approval rules
Mobile monitoring applications
API for third-party integrations
Advanced compliance reporting tools
Quick Reference
Supported Operations
Tokens
Mint
Tokens
Transfer
Tokens
Burn
Bonds
Issue
Bonds
Transfer
Bonds
Lifecycle
When to Use Automation
✅ Good Candidates for Automation
High-volume, routine transactions
Well-defined approval criteria
Time-sensitive operations
Transactions with pre-approved counterparties
⚠️ Consider Manual Review
First-time counterparties
Unusually large transactions
Non-standard requests
Regulatory-sensitive operations
Conclusion
The Custodian Service transforms tokenized collateral operations from a manual, time-consuming process into an efficient, automated workflow. By maintaining your control and oversight while eliminating operational bottlenecks, it enables you to deliver faster, more reliable service to your clients while reducing costs and risks.
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