Corda R3 the Payment system on a blockchain

2020: 85% of banks in Italy use a blockchain for data exchange about interbank transfers

At the end of July, 2020 it became known that most the Italian banks use R3 Corda solution blockchain. It allows credit institutions to accelerate process of double verification of transaction logs significantly.

The head of department of innovations of the Italian bankers association (ABI) Silvia Atanasio considers that a traditional data exchange system between banks, in particular the technology participating in implementation of it requires changes. Earlier on comparison of data a lot of time (from 30 to 50 days) left. Thanks to Corda technology the same tasks can be carried out during the day.

85% of banks in Italy use Corda

In May, 2019 the legislation of Italy which regulates interbank transfers was updated for inclusion of standardization of data in it. During the period from March 1 to October 1, 2020 Banks of Italy should take care of compliance of the activity to new rules, having implemented a blockchain system. For these purposes the staff of NTT Data developed an ad hoc network in which management the banking technology company SIA is engaged.

For the end of July, 2020 the project is at the second stage of deployment. Already about 55 Banks of Italy (85%) successfully use a blockchain platform for data exchange. It is expected that within the last two stages (the middle of fall of 2020) the number of the banks supporting a blockchain will extend up to 70-100.

The head of department of work with blockchain technologies in Banca Mediolanum Demetrio Milyorati noted that before new standardization each bank used the software for data exchange about interbank transactions. ABI considered the possibility of use of the centralized database instead of Corda. It was necessary to refuse this idea as at such approach banks should store all data in separate registers again. With Corda all changes in the magazine of data are visible to all other banks at once.^[1]

2019

Integration with the system of carrying out gross calculations in real time from Accenture

On November 26, 2019 the company Accenture reported that together with R3 and SAP the pilot systems of carrying out gross calculations in real time (RTGS, real-time gross settlement) based on technology of the distributed registers developed. Development will allow to optimize processes of calculations between banks and clients, making payments quicker, more reliably and more safely. The solution is integrated with the Corda R3 platform for ensuring interaction with the RTGS systems. In more detail here.

SWIFT will test the standard of payments with an algorithm of check of PoC based on Corda R3

On February 1, 2019 it became known that the global interbank network of SWIFT will test the standard of payments using algorithm check of proof-of-concept (PoC) based on the platform blockchain consortium R3 Corda using which monitoring of payment channels, support API and other standards will also be made. In more detail here.

2018: Testing of service of bank data exchange about clients based on Corda

Alfa-Bank in structure blockchain- consortium R3 tested the practical solution on the international bank data exchange on corporate clients. Part in the pilot was taken by about 40 organizations, including banks, business structures and regulators of a number of the countries. Among them – Alfa-Bank BNP Paribas Deutsche Bank ING, Societe Generale and UBS. On July 12, 2018 reported about it in Alfa-Bank which acted as the only Russian participant of the international project.

The solution assumes shared access of banks to the documents of corporate clients necessary within the policy of KYC ("Know your customer").

As you know, the KYC procedures are the requirement of regulators of the majority of the countries and are directed to increase in transparency of financial transactions, warning of fraudulent activity, counteraction of legalization of income and terrorism support. Before opening of the account and transaction banks identify the client and request from it documents and questionnaires. These data are separate so far. The blockchain allows to lower operating costs of banks since they can address results of the previous checks which are already carried out by other participants of a system. In turn, clients do not need to duplicate repeatedly the same documents in response to requests of different financial institutions. Besides, simplicity of information exchange gives the chance to accelerate updating of data of KYC that optimizes process of tracking of the risks including connected with suspicious transactions emphasized in Alfa-Bank.

The service tested by R3 is created on the Corda platform. Its features — privacy and an ability to manage data (unlike initial blockchain technology which is based on the invariance of the made records). Transactions on Corda are broadcast not to all its participants but only to those which have the rights to viewing specific record.

During the 4-day pilot with participation of Alfa-Bank more than 300 transactions in 19 countries located in 8 time zones were carried out. Banks requested access to test data of corporate clients while the last could satisfy it or cancel. Besides, clients changed information on themselves, at the same time it was automatically updated for all banks which had permission to access to KYC profiles of these companies.

Similar solutions are studied also in Russia — in particular, pointed out the Central Bank of the Russian Federation their demand. Experience of the pilot with R3, certainly, is interesting to improvement of KYC procedures in the Russian legal framework. The project is also an example of successful integration of Russia into the international technology trends — the head of department of the international compliance of Alfa-Bank Dmitry Ustinsky noted.

2017

Presentation

The consortium of the largest world banks R3 developed and started the Corda blockchain platform in November, 2017. The platform presentation for financial sector took place in To Moscow, on November 14. The platform is developed for the financial sector and, according to organizers, incorporated the best from Bitcoin, Ethereum and other networks.

At the same time it has a number of differences from other blockchain platforms. In particular, Corda does not use cryptocurrency, however its participants can tokenize the asset. Information on transactions in Corde is available only to those participants who participate in transaction.

A consensus is reached at the level of each transaction, but not at the level of all system. The design of the platform allows the regulator to watch work of nodes. Also the platform saves smarts contracts which are strong communication between the juridical party.

Announcement

At the end of October, 2017 blockchain- the consortium R3  announced development of an international payment system with the assistance of 22 world's largest banks. She is called to organize turnover of traditional and digital currencies through a blockchain.

It is about the full-fledged joint bank infrastructure for payment transactions created on the Corda blockchain platform. A system digitalizes fiat assets that allows to simplify all process of their transfer between project participants.

Besides, the architecture of a new solution can be adapted at emergence of the new digital currencies released by the central banks.

The leading banks created an international payment system on a blockchain

It is supposed that such development will promote increase in efficiency of world trade due to simplification and acceleration of the international payment traffic. Traditional payment systems allow to transfer money from one country to another only for several days that slows down trade and does not allow business to earn in addition millions of dollars, increases risks of not carrying out payments and fraud, reduces  liquidity  of banks. The blockchain technology should provide implementation of payment transactions in real time.

The new initiative was supported by such large financial companies as Barclays, BBVA, CIBC, Commerzbank, DNB, HSBC, Intesa, KBC, KB Kookmin Bank, KEB Hana Bank, Natixis, Shinhan Bank, TD Bank, U.S. Bank and Woori Bank.

This solution will become a crucial event for any bank or the company whose business is connected with the international payments, and is a key part of broad strategy R3 for use of a blockchain for faster and effective implementation of all types of financial transactions — the head of R3 organization David Rutter said.

The test version of the payment system working at a blockchain is going to start by the end of 2017.^[2]

Notes