R3 Reveals 8 Areas of Focus for Blockchain Bank Trials
R3CEV's top lawyer talks about 8 proof-of-concepts in the works. But the areas he focused on won't necessarily be replaced by the technology.
A consortium of over 40 financial institutions around the world is currently working on at least eight different proofs-of-concept (PoCs) to show how distributed ledgers can be used to streamline a wide range of transactions on Wall Street – and make them easier to regulate.
Speaking at the Blockchain & Distributed Ledger Conference today, an executive for R3CEV, the startup behind the consortium, listed off eight different areas for which his company was promoting work on proofs-of-concept. These include system interoperability, payments, settlement, trade finance, corporate bonds, repos, swaps, and insurance.
The conference drew a crowd of about 50 regulators, product developers, law enforcement lawyers and other finance industry representatives.
Jacob Farber, general counsel for R3, told attendees:
The comments come after R3 revealed its plans for Corda, a distributed ledger designed with an eye to the specific privacy requirements unique to financial institutions.
Disruption, not replacement
Farber, who previously worked at law firm Perkins Coie – which co-chaired the conference along with American Express – emphasized that the projects in these areas were not intended to replace the entire category in any instance.
Instead, the PoCs will take subsets of the services and try to write them into its distributed ledger.
Specifically, Farber mentioned post-trade reporting, reference data, and regulatory data provision as especially intriguing applications.
"There’s all sorts of interesting applications on blockchain that are well short of replacing the whole cradle to grave process," said Farber.
In other remarks, Farber took issue with the term “smart contracts,” used to describe legal agreements enshrined into a blockchain, codifying certain obligations that are triggered once a predetermined set of events takes place.
Similarly, in a panel on the subject the previous day, Patrick Murck, fellow at Harvard’s Berkman Center for Internet & Society and former executive director of the bitcoin industry trade group the Bitcoin Foundation, said he “chafes” at the term, coined by Nick Szabo in 1997.
Murck offered the alternative “programmatic transactions”, explaining that the contracts almost always have a traditional counterpart contract, and are only mechanical implementations that are already possible using more traditional technology.
Today was the last day of the two-day conference hosted by the American Conference Institute that spanned a wide range of topics from law enforcement to the position of regulators in the blockchain space to the nature of smart contracts.
Image by Michael del Castillo for CoinDesk
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.