David Rutter, founder and CEO of the R3 blockchain consortium took the stage in London earlier this week to discuss the progress of his company and underscore Wall Street’s enthusiasm over distributed ledger technologies.
Speaking at TechCrunch’s Disrupt London event, Rutter discussed R3’s distributed ledger platform Corda, spearheaded by the company’s CTO Richard Gendal Brown, the former executive architect for industry innovation and business development for IBM.
Corda, which was open sourced last week, is a financial grade distributed ledger platform that records, executes and manages institutions’ financial agreements in perfect synchrony with their peers. It was designed from the ground up to address the specific needs of the financial services industry, and is the result of over a year of close collaboration between R3 and its consortium of over 70 of the world’s leading banks and financial institutions.
Rutter talked at length about how the platform had been heavily inspired by and captures the benefits of blockchain systems, but with design choices that make it able to meet the needs of regulated financial institutions. Crucially, Corda restricts access to data within an agreement to only those explicitly entitled to it, rather than the entire network. Rutter described it as the “plumbing and infrastructure for the future of finance.”
Asked what was wrong with the current “plumbing,” Rutter stressed that there’s simply too much room for improvement. Citing a McKinsey study, saying that its shows banks spend on the order of $3.6 trillion globally supporting their transactions, he likened current technologies to “spaghetti string.”
Rutter went on to say that R3 sees a “once in a generation” opportunity to help banks move to a secure financial infrastructure in the cloud – one that enables them to process and track nearly any kind of trade or money transfer nearly instantly, at less cost, rather than have to set aside money until each transaction is settled.
It’s a “panacea for regulators,” he added. “The way [things] work now, we record [transactions] on paper or enter them into a system” and there’s plenty of room for “shenanigans.” Meanwhile, he insisted, with distributed ledger technology, “the idea of hiding a ticket or manipulating a trade will be a thing of the past.”