R3 turns its back on blockchain?
Is the R3 consortium going to wave goodbye to $53 million in research and abandon blockchain?
In a presentation on its Corda platform, R3 says it doesn’t need “block chain”. (No space is usually used, but I don’t want to be too much of a grammar Nazi.)
Credit for this spot must go to Twitter user @Beautyon_ – see tweet below.
R3 concedes defeat: "No Block Chain, because we don't need one" pic.twitter.com/tHE3I6U8mN
— Beautyon (@Beautyon_) February 21, 2017
The long list of comments on that tweet are a delightful mixture of ridicule, contempt and queries. But that’s what happens when you get a lot of anonymous people communicating.
Also, to stoke the rumours further, in a conference in January, R3 associate director Clemens Wan said: “We found that we didn’t want a blockchain, we wanted to be blockchain inspired.”
In fact, R3’s Twitter account has just been updated to reflect this and says: “It represents the biggest shared effort of bringing blockchain inspired technology to the financial markets.”
However, just last month the Depository Trust & Clearing Corporation (DTCC) chose IBM, in partnership with Axoni and R3, to provide a blockchain/distributed ledger technology (DLT) framework to drive improvements in derivatives post-trade lifecycle events.
And despite last year’s news that US Bancorp, Macquarie and JP Morgan were understood to have opted out of an R3 fundraising effort – the latter still has plenty of banks in its gang.
Banking Technology contacted R3 for its comments on this development.
Charley Cooper, R3 managing director, says: “We’ve been flattered by all the attention this past week. Too bad the story isn’t a story. We’ve said from the beginning that while Corda is a distributed ledger platform, it is not a traditional blockchain platform and was never designed to be one.
“Despite often being conflated with distributed ledger technology as a whole, blockchains are specific pieces of software originally built to handle transactions of virtual currencies. They cannot be applied unthinkingly to wholesale financial markets: changes must be made to satisfy regulatory, privacy and scalability concerns. And that is what we have done with Corda.
“Corda’s distributed ledger technology was designed from the ground up to address the specific needs of the financial services industry. It is 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.”