An outstanding product always tends to cause a mixed reaction. Indeed R3, a New York-based innovation company focused on building and empowering the next generation of global financial services technology, has recently been subject to criticism.
Patrick Byrne, Overstock’s CEO, has warned that the project can stifle innovation. He expressed his opinion concerning the initiative on Blockchain Agenda in San Diego.
— Patrick Byrne (@OverstockCEO) December 21, 2015
“What’s happening is Wall Street is trying to slow us down while they come up with their own version, and that’s, I think, R3,” said Byrne. “Wall Street comes up with their own version, and then they’re going to outlaw [the competition]. So really be alert for R3.” According to Byrne Wall Street aims at slowing down the Bitcoin revolution by means of R3. The startup is only an “attempt to create a blockchain that could be brought to regulators as a legally-enforced standard”.
Notably Byrne once strived to join R3 but faced a refusal. “We tried to join,” he recalls. “But they wouldn’t let us join — even though we’re far ahead of everybody.”
Meanwhile R3 continues to grow and gather pace. After the recent entry of 12 new banks, the total number of members makes up 42. Since the very launch in September, when 9 world’s large banks united to apply blockchain to financial services, commercial products and financial-grade distributed ledger solutions have been developed and the initiative have no plans to stop.
As for now the company has closed the window for the admission of new bank members. It wants to focus on more intensive involvement of non-bank institutions.
David Rutter, CEO of R3, says: “Partnering with a broad range of institutions has always been central to our strategy of developing distributed ledger technologies that will truly benefit the financial services industry as a whole. Securing the backing of 42 of the world’s leading banks demonstrates the level of interest in our initiative, and we now look forward to exploring collaboration with non-bank institutions and expanding our already diverse group.”
Overstock under the leadership and brave ideas of Byrne is also forging ahead. It has got approval from the Securities and Exchange Commission (SEC) to issue company stock using blockchain. Thus the company will issue public securities via the Internet which facilitates the trading process considerably.
The terms of technology application are not defined yet, but the beginning of 2016 is the most likely date. The success of Byrne’s idea will strongly depend on the readiness of investors to take some risk. Their initial wary attitude is quite understandable.