Bank consortium tests largest trial of blockchain technology
(4 March 2016 – Global) Blockchain consortium R3 has connected 40 banks to five different distribution ledgers and allowed them to facilitate issuance, secondary trading and redemption of a fixed income product in the largest known trial of the technology to date.
The banks connected to R3-managed private distributed ledger technologies built by Chain, Eris Industries, Ethereum, IBM and Intel. Each evaluated the strengths and weaknesses of the technology by running smart contracts that were programmed to facilitate issuance, secondary trading and redemption of commercial paper.
Each of the distributed ledgers ran a smart contract based on identical business logic to enable the banks to accurately compare the difference in performance between them. Cloud computing technology to host the distributed ledger was provided tech giants Microsoft Azure, IBM Cloud and Amazon AWS.
“This development further supports R3's belief that close collaboration among global financial institutions and technology providers will create significant momentum behind the adoption of distributed ledger solutions across the industry,” said David Rutter CEO of R3.
Tim Grant, managing director and global head of R3's Collaborative Lab said: "With the completion of this trial we have raised the bar significantly with the sheer number of global financial institutions, distributed ledger technologies and cloud providers working together in parallel to demonstrate how this nascent technology can be applied to real-world financial markets processes by deploying smart contracts on an actively traded asset class.”
ING's global head of payments, Jurgen Vroegh added that the experience demonstrated the beneficial aspect of collaborative communication between member banks in this emerging technology space.
"The engagement between the member banks at all levels and across all disciplines was very intense and full of enthusiasm," he says. "With constructive in-depth communication we really managed to create an expert community. The trials gave us a higher level of understanding of the various technology options and insight on how smart contracts can really work on a distributed ledger.”
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