Enterprise blockchain software provider R3 has issued a statement announcing that Corda, its blockchain platform has successfully completed a live commercial paper transaction.
In collaboration with Commerzbank, ING, Natixis and Rabobank, the transaction was carried out on the Euro Debt Solution application which was built on Corda. The transaction is a follow-up to a similar transaction simulated on an earlier version of the application in September 2017.
From launch in 2017, the stated aim of the Corda consortium has been to leverage blockchain technology to provide consequential benefits for issuers. According to the statement from R3, the intention is to achieve this by “offering a streamlined capability for accessing debt whilst bringing greater transparency to the marketplace.” The intention is that the participating institutions will enjoy reduced operational costs and risk as well as the ability to deliver intraday settlement finality for their clients.
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The transaction involved the issuance of a €100,000 notional with a one-day maturity, with Commerzbank providing the pilot framework, software, distributed ledger network and guidance on regulatory implications. Natixis acted as the issuer, Rabobank acted as the investor and ING served as both dealer and escrow agent.
Commenting on the success of the live transaction, R3 CEO David E. Rutter said:
“The issuance and settlement of securities is a complex process and current models are rife with inefficiency. Corda addresses these challenges by enabling parties to financial agreements to record them once and collaborate to maintain accurate, shared records of these agreements. The successful live trade on the Euro Debt Solution not only demonstrates that blockchain provides clear advantages over existing processes but marks the next step towards a production-ready solution on Corda.”
Other project partners also expressed satisfaction with the success of Corda including Marnix Bruning, Head of Money Market & Central Bank Sales at ING who stated that the company is eager to continue the collaboration into the next project phase. Head of Digital for Corporate & Investment Banking at Natixis, Frederic Dalibard expressed eagerness for a full commercial launch of the solution with the attendant positive implications for operational efficiency.
According to Youssef el Mir of Rabobank, Global Head of STIRT and Commercial Paper Trading, the pilot trade not only demonstrates the company’s determination to lead innovation-driven financial markets, but also taps the potential of blockchain technology to open new frontiers in settlement speed and clearing. This he said, will benefit customers by giving them a more efficient product experience, and will ultimately benefit the company.
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