R3 Announces Corda™, a Blockchain-Inspired Platform for Financial Services

Chatsworth client R3 has announced that it is building a platform, Corda, for its members to test use-cases and evaluate blockchain-inspired technologies. Richard Gendal Brown, Chief Technology Officer at R3 explains more below:

“As reported in Bloomberg this morning, I’m delighted to confirm that R3 and our member banks are working on a distributed ledger platform for financial services: Corda™.

“For the last six months, my team and contributors from our membership have been building a distributed ledger platform prototype from the ground up, specifically designed to manage financial agreements between regulated financial institutions. I am massively excited by the progress our team, led by James Carlyle, our Chief Engineer, and Mike Hearn, our Lead Platform Engineer, are making and I think the time is right to share some details.”

Read Richard’s full blog post here.

Microsoft and R3 partner to accelerate adoption of blockchain-inspired technologies

Tech giant Microsoft and Chatsworth client R3 today announced a strategic partnership that will accelerate the use of blockchain-inspired distributed and shared ledger technologies among R3 member banks and global financial markets, as reported by the Wall Street Journal and Bloomberg.

These technologies enable enterprises and business network participants to complete financial transactions with greater speed, security, cost-efficiency and transparency relative to solutions currently used.

As part of the partnership, R3 will use Microsoft Azure as a preferred cloud services provider in its R3 Lab and Research Centre, where distributed and shared ledger technologies are being developed and tested and use-cases carried out based on an extremely rigorous, empirical-evidence based process.

The Lab and Research Centre has quickly become the centre of gravity for use-case testing and evaluation of blockchain-inspired technologies, bringing together banks, non-banks, both established and start-up financial technology companies, trade associations and regulators.

R3 and consortium members will have access to Microsoft’s expanding ecosystem of Blockchain-as-a-Service (BaaS) partners including Ethereum and ConsenSys, Ripple, Eris Industries, Coinprism, Factom, BitPay, Manifold Technology, AlphaPoint, IOTA, BlockApps STRATO, Tendermint LibraTax, and many others that will aid in the development, testing and deployment of distributed ledger applications in cloud, hybrid and local environments.

Settlement risks involving public blockchains – R3

Entrepreneurs, investors and enthusiasts claim that public blockchains are an acceptable settlement mechanism and layer for financial instruments. But Chatsworth client R3 argues that public blockchains by design cannot definitively guarantee settlement finality, and as a result, they are currently not a reliable option for the clearing and settling of financial instruments.

Read the full article by R3’s Tim Swanson on TabbFORUM

FinTech comes of age

The great and good of global finance and technology descended on the City of London Business School this week for a thought leadership discussion on the growing influence of new technology on the financial ecosystem. The discussion and content was excellent.

The FT’s chief economics commentator, Martin Wolf, chairing one of the panels provides an insightful summary of proceedings in his comment piece here

Chatsworth client,  R3 took a lead role in the panel debate, with observations on blockchain and its likely application to finance. The R3 team is leading the field in developing blockchain technology with its consortium of over 40 banks took a lead role in the panel debate.

We have worked in this field for over a decade, through the advent of electronic broking systems on traders’ desktops, evolving into more automation through API-based trading, first in equity markets and then into other asset classes such as FX.

This is now entering a whole new game, where incumbent systems and institutions are being challenged, and as a result need to adjust their models, technology and value proposition accordingly.

Our instinct is that the technology is the delivery mechanism but not the answer in itself.

Established systems, venues and institutions have the legal frameworks, proven capabilities, customer usage/coverage and liquidity in place – this is where their real value lies.

New technology is more likely to complement and integrate rather than entirely reorder the plumbing of global financial markets from top to bottom. That is why the meeting of the minds have to take place between financial markets practitioners and technologists.

Finance is a market of natural interest which rewards innovation  – it  will naturally size up and absorb the best emergent tech.

R3 brings eleven major global financial institutions together on a cloud based distributed ledger

Transition from vision to execution signifies commitment to practical application of distributed ledger technology

Financial technology innovation company, R3 CEV, today announced the successful completion of a ground breaking distributed ledger experiment involving eleven of the world’s largest financial institutions.

R3 and consortium member banks Barclays, BMO Financial Group, Credit Suisse, Commonwealth Bank of Australia, HSBC, Natixis, Royal Bank of Scotland, TD Bank, UBS, UniCredit and Wells Fargo each connected on an R3-managed private peer-to-peer distributed ledger, underpinned by Ethereum technology and hosted on a virtual private network in Microsoft Azure, the public cloud platform offering Blockchain as a Service (BaaS) in an accelerated development environment.

Participants were able to explore the technology’s potential to execute financial transactions instantaneously across the global private network. The banks simulated exchanging value, represented by tokenized assets on the distributed ledger without the need for a centralized third party.

In bringing a significant number of major banks onto a multi-lateral distributed ledger with global scale, the experiment – which was curated in the R3 Global Collaborative Labs (GCL) environment – represents a significant milestone in collaboration for the R3 consortium and a major step forward for the application of distributed ledger technology across the entire industry.

This collaborative experiment is the first in a series of projects, using a range of candidate distributed ledger technologies, and is designed to prove suitability of distributed ledgers for financial markets use cases. R3 will be announcing a series of additional projects borne out of its collaborative lab workshops over the course of 2016.

David Rutter, CEO of R3, commented: “The transition from vision and hypothesis to application and execution signifies the next major step towards using this technology to transform how institutions interact, report and trade with each other in financial markets. This is a very exciting development, both for R3 and our member banks, as well as the global financial services industry as a whole.”

Since launching its distributed ledger consortium in September last year, R3 has been running industry collaborative joint working groups with its 42 member banks to design and deploy advanced shared ledger technology in the global financial sector, incorporating multiple open source technologies and standards.

Several of the banks involved in the effort commented on the experiment:

“As we progress our evaluations of shared ledgers and smart contracts, we look forward to leveraging R3’s lab environment for collaborative technology experiments,” said Brad Novak, Chief Technology Officer for the Investment Bank at Barclays. “Ethereum is a well-known open source technology in this space and we also look forward to collaborative experiments using other technologies.”

“We innovate with the objective of providing effective, secure and convenient solutions to meet our customers’ needs,” said Cameron Fowler, Group Head, Canadian Personal and Commercial Banking, BMO Financial Group. “The successful completion of this experiment validates the potential of blockchain technology and we will continue to play a meaningful role in its development, along with our partners in R3.”

“Blockchain is an emerging focus for our industry and Credit Suisse. As one of the early participants with R3 we are very happy to be part of the consortium which leads the industry’s research into the value and applicability of this technology”, said Stephan Hug, Group Chief Architect, Credit Suisse. “We feel it is critical to be engaged to identify the opportunities that innovative technologies like this provide and ensure we maintain our position as a globally leading financial institution.”

“The new R3 globally accessible lab environment is enabling both R3 and member banks to collaborate technically on experiments related to shared ledger and smart contracts technology. As demonstrated by the first project that is already up and running, this lab platform will aid faster experimentation, provide technical agility and aid learning greatly,” said Richard Herbert, CIO, Global Banking and Markets, HSBC.

“Blockchain technology represents a fundamental shift for financial services, and we think it is important to be close to the technology being developed. Natixis is glad to cooperate with R3CEV and consortium member banks to enable and accelerate this transformation with a collaborative approach. This experiment is a significant milestone to bring this technology to market and it underscores our long-standing commitment to explore technology that has the potential to greatly enhance our customers’ experience”, said Olivier Perquel, Head of Financing and Global Markets for the Corporate and Investment Bank of Natixis.

Kevin Hanley, Director of Design, Services, at Royal Bank of Scotland commented: “We continue to be excited about the possibilities that blockchain offers and encouraged with the progress that we are making with others through our involvement with R3 and GCL.”

“At TD, we have an ongoing commitment to technical innovation. To be successful, we need to collaborate in the spaces that allow us to provide continued excellence for our customers,” says Jeff Henderson, EVP and CIO for TD Bank Group. “Blockchain and R3’s initial project is a sign of our industry’s willingness and ability to transform; TD is playing a leadership role in shaping our industry’s future.”

“Proving the scale and peer-to-peer operation of blockchain experiments is an important next-step in this transformational initiative. Through connecting 11 bank labs into a simulated-real-world network, we’re able to establish the platform we need to test our theories effectively in a safe environment,” added Alex Batlin, UBS Senior Innovation Manager.

“The kick-off of this project, within the R3 Global Collaborative Labs initiative, is another step forward for UniCredit in the evolutionary path undertaken in order to exploit the benefits of blockchain technology, which represents a powerful enabler to keep playing a leading role in the financial services arena” said Paolo Fiorentino, Deputy General Manager of UniCredit.