The operator for China’s official interbank market trading platform has joined New York’s blockchain-based startup R3.
Based in Shanghai, the China Foreign Exchange Trade System (CFETS) is the country’s official platform that covers a number of financial operations including issuance, trading, post-trade processes, exchange rates and more.
As the country’s platform interbank trading between Chinese and international banks, CFETS operates under the guidance of the People’s Bank of China – China’s central bank.
With its membership, CFETS will join a common working group with over 70 of the world’s major financial institutions to explore and develop blockchain solutions for operations.
In a statement, CFETS executive vice president Zaiyue Xu added:
CFETS is committed to establishing technical standards and improving the ecosystem of China interbank market, and we have noticed that blockchain is an emerging technology with great promise to reshape the market.
The financial services firm is the third Chinese firm to join the ever-growing ranks of R3’s membership roster. Earlier this year in May, the Ping An Financial Services Group - the largest non-state-owned financial entity in China with assets of over $765 billion – became the first ever Chinese R3 member. In September, the China Merchants Bank (CMB), a commercial bank wholly owned by corporate legal entities in the country became the second Chinese member to join R3, with assets of over $800 billion to show in 2016.
It was only a matter of time before the R3 banking consortium – perhaps the most-known and prominent private blockchain project by the financial industry – began including Chinese members with the country home to the most number of banks in the global top 50.
“Acknowledging the Chinese renminbi’s (China’s fiat currency’s) growing prominence in trading and the crucial role China holds in the global financial markets,” R3 CEO David Rutter welcomed CFETS to the consortium.
Their expertise will be an enormous asset as we develop universal applications for distributed ledger technology across increasingly globalized financial markets.
A Common Banking Blockchain Standard?
Following a year of what was a high-profile and equally well-guarded banking blockchain endeavor, R3’s blockchain software Corda, will go open-source via the Linux Foundation-led Hyperledger Project later this month.
Corda, the software product of R3’s Concord project is the coordinated result of the consortium’s effort to develop a blockchain solution for the financial industry. “We want other banks and other parties to innovate with products that sit on top of the platform, but we don’t want everyone to create their own platform” said R3 chief engineer James Carlyle following R3’s announcement to go open source with its software.
The Corda software, which R3 filed a patent for in August 2016, would see the R3 blockchain gain wider adoption to become the common financial infrastructure among banks and institutions around the world, if R3 had its way.
If we have one platform with lots of products on top, then we get something that is more like the internet, where we still get innovation but we can still communicate with each other.
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