Best Distributed Ledger Technology Provider: R3

Central Banking FinTech RegTech Global Awards 2018
CBFRGA18-WINNER
David Rutter – chief executive – R3
David Rutter, chief executive

In recent years, relationships between banks and technology firms have been proliferating as the financial sector looks for ways to innovate its products and services. Distributed ledger technology (DLT) has emerged as a solution set to revolutionise the sector, and leading its adoption is New York‑based technology firm R3

R3 leads a consortium of financial firms founded in 2015 by nine large commercial banks. Since then, R3 has continued to build relationships with both the private sector and public financial institutions to develop DLT solutions fit for the market. The consortium now has more than 200 members. 

Its flagship solution is Corda, the first enterprise blockchain platform designed to record, manage and synchronise contracts between trading partners. Corda is heavily inspired by blockchain models, but without the design choices that make traditional blockchains inappropriate for many financial scenarios. 

Via the platform, traditional contracts are transformed into ‘smart contracts’, executed using code that runs on a Java virtual machine (JVM), a design choice driven by its wide adoption in the financial services space and its rich and extensible functionality. However, Corda’s JVM implementation has added security and performance features that other DLT options already on the market do not provide. 

While most blockchains operate on a decentralised model, Corda’s platform only sends data to those for whom it is necessary. This feature is a result of the need for banks to ensure the confidentiality of trades and agreements. 

Currently, R3 is engaged with the Bank of Canada to develop an interbank domestic payments settlement system. Recent proofs of concept produced through this collaboration have already demonstrated that securities can be settled in real time on a distributed ledger. Along with partner HQLAx, R3 completed its first live securities lending transaction on the platform – between Credit Suisse and ING – in March 2017. 

Looking to the future, R3 intends to engage more with regulators. Work is underway in Asia to develop an interbank domestic payments solution with the Monetary Authority of Singapore, using a digital version of the Singapore dollar for interbank payments. It is also working with the Financial Conduct Authority to develop a regulatory system for the UK mortgage industry. 

R3 and its partners are working to create global and mobile access with the launch of the first commercial applications based on Corda, known as CorDapps. It is also working with a number of regulators.

Corda’s success is evident not only by the number of institutions that use the ledger, but also by those looking to invest in the technology. Last year it raised an additional $107 million from more than 40 institutions, including Bank of America Merrill Lynch, HSBC and Temasek.

 

Read the full Central Banking FinTech RegTech Global Awards 2018 Winners In Focus report

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