Consortium R3

Command R3 from ideologists of the financial industry, developers, experts on a blockchain and to cryptocurrencies works together with consortium members within the researches, design and developments to move forward technologies and to adapt them for requirements of banks for identification, confidentiality, security, scalability, compatibility and integration with the existing financial systems.

Working in New York, London and San Francisco, command R3 consists of veterans of the financial industry, developers, and financial technical-entrepreneurs, integrating specialists from electronic financial markets, cryptography and digital currencies.

Participants of R3 international consortium are (selectively): Morgan Stanley, JP Morgan, Bank of America of Merrill Lynch, Goldman Sacks, BBVA, BNY Mellon, ING, HSBC, Commerzbank, Banco Santander, Nordea, Royal Bank of Scotland, UBS, Alfa-Bank and other financial institutions.

R3 Lab and research center became the center of gravity for joint surveys and testing of the distributed and general register technologies in which the R3 works with the partners to define, design and implement a financial infrastructure of new generation.

Consortium R3  for financial and commercial purposes provides access to business — to the Corda platform which works with members of consolidation over improvement of interaction within cooperation and joint projects and also transforms registration applications for commercial use.

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2018

Accession of the Center of "Orbit"

The center of "Orbit", the developer a solutions blockchain for a public sector, in June, 2018 became the partner of the international blockchain consortium R3. "Orbit" became the first Russian technology company which entered into consortium. As of June 13, in it two Russian banks — Es-bi-ay Bank and Alfa-Bank also consist. Read more here.

Accession of Alfa-Bank

Membership of Alfa-Bank in R3 association will allow to take one more qualitative step in development a blockchain systems for all domestic bank industry and further will give the chance to provide to clients more convenient and available product solutions.

"The accession to blockchain consortium R3 is an important milestone on the way of integration of Alfa-Bank, the first Russian participating bank, and further and all Russian bank community in the latest global financial infrastructure, - the chief operating officer of Alfa-Bank Maria Shevchenko noted. - It is an excellent opportunity together with the leading players of global market to create new instruments of commission of financial transactions and also to considerably accelerate settlement according to transactions and to reduce cost value of separate transactions".

The main article Information technologies in Alfa-Bank

2017

Raiffeisen accession

Raiffeisen Bank International became the first Austrian bank which joined consortium R3, the global system integrating more than 160 banks, financial services, the technology companies, regulators and trade associations. Within work in R3, Raiffeisenbank will focus on work with cash and payment services, services on security and financing of trade operations.

2016

Why the largest banks run from world blockchain consortium?

In November, 2016 the world consortium on a blockchain of R3 was left at once by two companies which stood at the origins of creation of syndicate – Goldman Sachs and the largest financial and credit Banco Santander group of Spain.

It is expected that Morgan Stanley and the National Australia Bank can leave consortium, sources of Reuters reported about it. Among those who are going to leave R3 also J. P. Morgan, Macquarie Group, U.S. Bancorp are called – the CEO Epiphyte blockchain startup Edan Iago reported about it in the account in Twitter. He refers to the document which transferred it its source in banking sector. Too laid out the link to this document of Iago on November 25, but after a while it was deleted.

Referring to the document, Edan Iago reports that consortium R3 intends to attract from participants $150 million in exchange for an equity in new subsidiary company, but by November, 2016 the consortium secured with promises of banks only for $56.5 million. It is important that at the same time consortium members will not be able to acquire the right to an end product.^[1]

The Russian company Qiwi which in the fall of 2016 was included into consortium R3 refrained from comments on the possible reasons of an exit of banks from syndicate. At the same time the director of the corporate relations of the Qiwi group Konstantin Koltsov reported that "at the moment the QIWI is not going to leave the list of participants of consortium R3".

The source of TAdviser in one of R3 participating companies considers that the attempt to attract new shareholders led to an exit from consortium and, thus, to lower a role of the first (we will remind that now it was left by "old residents"):

In my opinion it generally discontent of old shareholders of consortium with washing out of shares and involvement of new shareholders.

Other source of TAdviser, the co-owner of the company in the field of a blockchain says that it was expected. According to him when the consortium was created, moved its participants fear that "there will be an alternative financial reality in which banks will not be".

Here they also decided to make the interbank blockchain, but with a blackjack and girls, - the interlocutor of TAdviser says.

But later some participants of R3 could be disappointed in a blockchain as in suitable technology for them and in such format of cooperation – banks were not ready to disclose information on the transactions to competitors.

Inveterate competitors had to begin to trust each other, providing information in the unified distributed register. It is already huge barrier, – the interlocutor of TAdviser believes. – Their requirements to privacy of transactions considerably complicates a solution architecture, there is a set of roles. And generally there is a question why banks need it, they have effective systems for information exchange about financial messages as it is, there are intermediaries who do it long ago and successfully, the SWIFT, CLS type, etc.

Thus, technology it appeared to make very not easy working blockchain which would consider all various requirements of participants. "According to information from different sources, allegedly at consortium in a year it did not turn out to collect the working beta", – the interlocutor of TAdviser says.

He believes that the outcome from ranks R3 will proceed some time, but hardly the consortium will break up completely – the format developed and a certain code was acquired. Most likely, in it there will be companies which are really interested in development of technology – more open and less bureaucratical.

For the first time the credit card issuer joined consortium R3

The accession to blockchain consortium R3 was announced in October by Synchrony Financial company. Synchrony Financial, being the credit card issuer in the USA, expects that creation of the innovation commercial applications for the financial industry that will accelerate distribution and implementation of blockchain technology will become result of cooperation.

The QIWI joins consortium R3

The QIWI group announced in October, 2016 accession to the international consortium of financial innovations R3 for joint development and to use of technologies of the distributed registers in world financial markets. As the member of R3, QIWI joins more than 60 financial institutions, the global financial technologies of new generation integrated for the purpose of creation.

The QIWI is the first company from Eastern Europe and Russia in particular which joined a global network of the partners of R3 working together in the unique laboratory environment of R3 research center which quickly became an attraction point for joint surveys and tests of technologies of the distributed registers. Partnership with QIWI will also promote expansion of a zone of influence of consortium R3 in the new markets and regions.

The R3 is engaged in development of master templates for smart contracts

Consortium R3 which is engaged in developments in the field of technology of a blockchain together with Barclays Bank, ISDA, legal and scientific institutes conducts researches in the development area of storages of master templates for the smart contracts used in trade and the securities management on the distributed and general registers^[2].

Now each bank saves an own copy of contracts which can have contradictions and problems with reconciliation. The smart contracts working at the distributed and general registers allow each of the parties to see the same set of the approved legal documents.

The new group consisting of representatives of Barclays, ISDA, UCL and Norton Rose Fulbright was created for the purpose of problem solving, the master templates connected with development for smart contracts, at the same time the particular emphasis is placed on how they can be implemented within the existing regulatory framework.

In the long term the group is aimed at that with participation of legal community and scientists to investigate how to bring smart contracts to that stage at which they can be accepted by court and be used for start of the procedure of the dispute resolution.

The technical director of R3 Richard Brown, comments: "The technology of the distributed registers gives hope that we will be able to move in the direction of such world where difficult financial agreements between firms can register and be controlled consistently and precisely without duplication, errors and unnecessary costs. Nevertheless, to implement this concept, the technology should be more, than just the innovation: it should be built in wider legal context and consider business realities".

Barclays Bank showed a prototype of templates of smart contracts based on which the agreement of ISDA was created and the swap is carried out by interest rates which then was executed as the smart contract on the R3 Corda platform.

The chief engineer of investment bank of the Barclays group Lee Braine urged banks to expand joint work scales: "Barclays actively is engaged two years in studying of blockchain technology of area, including, makes experiments with products of suppliers, supports the innovation startups through the London business incubator of Barclays Accelerator and also participates in industry consortia, such as R3 and Post-Trade Distributed Ledger Group. This year Barclays Investment Bank conducted more in-depth studies of smart contracts, using resources of the technologists, lawyers and front offices and cooperating with industry and scientific communities through open innovations. We with impatience expect continuation of cooperation".

Microsoft tries to make Azure a basis for a blockchain systems of banks

On April 4, 2016 Microsoft combined efforts with banking consortium to help to develop new methods of use of blockchain technology of the cornerstone system bitcoin – for support of financial transactions.^[3]

R3 CEV - the company which heads consortium from more than 40 leaders of world banks for development and promotion^[4]will get access to the cloud Microsoft Azure resources within strategic partnership between two companies. In the New York department of R3 Bank of America, Credit Suisse, Goldman Sachs, and UBS are among banks of consortium.

Microsoft tries to make Azure a basis for a blockchain systems of banks

What is even more important, Microsoft will provide specially developed technical equipment and support for laboratory stands R3 which are physical platforms where banks can come, develop and test blockchain technology.

This technology can help to accelerate traditional financial transactions, such as stock trading and bonds that is the reason that banks partners of R3 are interested in use of this technology.

In exchange for the deposit to this partnership, Microsoft will have an opportunity to convince these banks to use the cloud platform of Azure, especially the offer blockchain-as-service which the company creates through partnership with other companies.

If Microsoft convinces banks to use Azure as a basis new a blockchain of systems for accomplishment of important tasks, it has a potential to earn a lot of money on the future of banking activities.

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