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The Chief Technology Officer of the R3 project has unveiled a new blockchain-based platform designed to record and synchronise agreements across financial institutions.
R3 CEV and members of its blockchain consortium are reportedly working on Corda, a new distributed ledger system. The startup’s CTO, Richard G Brown, has unveiled the news in a blog post on the company’s website.
Formed six months ago, the R3 project has attracted the world’s major banks, such as Goldman Sachs, JP Morgan and Barclays. The consortium is building commercial applications of the blockchain technology across the financial industry.
In January, the consortium successfully completed the first testing of the blockchain system using Ethereum platform. Almost two months later, the cooperation conducted the second and the largest trial to find the best way of using the technology.
The new Corda platform was specifically developed to record and control agreements between financial organizations.
“Corda is a distributed ledger platform designed from the ground up to record, manage and synchronise financial agreements between regulated financial institutions. It is heavily inspired by and captures the benefits of blockchain systems, without the design choices that make blockchains inappropriate for many banking scenarios,” Brown said.
Corda supports a range of consensus mechanisms and has no native digital currency. The platform’s design directly enables regulatory and supervisory observer nodes. Meantime, an access to data is available only to parties that have a legitimate need to know. The transactions are confirmed by the parties to the transaction, not by unrelated validators.
Currently, the process of recording and reconciling financial agreements takes huge amounts of time and money. The agreements are generally recorded by two parties in different systems and when these systems can’t reach agreement, companies have to spend a lot of money on solving the problem.
“Now imagine we had a system for recording and managing financial agreements that was shared across firms, that recorded the agreement consistently and identically, that was visible to the appropriate regulators and which was built on industry-standard tools, with a focus on interoperability and incremental deployment and which didn’t leak confidential information to third parties,” he wrote.
According to Brown, the R3 consortium is not developing a blockchain. The team is against the notion that transactions data should be shared between all participants of the network. Instead, they are focused on individual agreements between companies.
“We know there will still always be some disputes and we should specify right up front how they will be resolved,” Brown wrote. “We need to make it easy to write business logic and integrate with existing code; we need to focus on interoperability. And we need to support the choreography between firms as they build up their agreements.”
A few days ago, Microsoft announced it joined the consortium to help develop blockchain solutions for the financial services. The company provided its cloud platform, Microsoft Azure, and access to its network of Blockchain-as-a-Service solution providers.