Developing Blockchain Platforms to Drive Financial Institutions

Asia Blockchain Review

September 24, 2019

Banks, financial institutions, and stock exchanges around the world are seeking ways to utilize blockchain, with only the best blockchain platform developers chosen to help drive financial institutions forward. Asia Blockchain Review recently spoke to Carl Wegner, Managing Director of R3, an enterprise blockchain software firm working with over 300 participants across multiple industries to develop on Corda, its open-source blockchain platform, and Corda Enterprise, a commercial version of Corda for enterprise usage. Wegner talked about working with the Bank of Thailand on Project Inthanon, opportunities for London post-Brexit, and R3’s role in the Brazilian stock exchange.

Asia Blockchain Review: For some of our readers who may be unfamiliar, what can you tell us about Corda and Corda Enterprise? What are their key differences?

Carl Wegner : Corda is our open-source blockchain platform where firms build their CorDapps to expand their business, remove friction, and deliver new products to market faster in order to transform the industries in which they operate. 

Corda Enterprise is a commercial distribution of Corda specifically optimized with features fine-tuned for the requirements of modern-day businesses. Corda Enterprise is fully interoperable and compatible with Corda. Its main differentiator is that it contains the world’s only Blockchain Application Firewall, which enables it to be deployed inside data centers, while being able to communicate securely with nodes anywhere else in the world. 

 

ABR: The Bank of Thailand (BoT) has been reporting the latest developments in Project Inthanon, which uses smart contracts to automate aspects of bond trading. Can you share with us how you started to work with the BoT and your role in the project?

CW: Blockchain technology and central bank digital currencies (CBDCs) have the potential to completely revolutionize payments. The project offered us one of our earliest opportunities to demonstrate how Corda is the most suitable platform solution to revolutionize payments. Our goal has always been to address business pain points by preventing fraud, improving transparency, and streamlining operations and reconciliation. 

Our involvement in Project Inthanon from the outset has been a key part of our wider strategy to collaborate with the Thai banking community. The continuing involvement of R3 in Phase II and the upcoming Phase III of the project marks an important vote of confidence in Corda as the technology best suited to improve financial infrastructures across the globe. 

 

ABR:  How do you position this project as part of your milestone? Moreover, what is the next step for Project Inthanon?

CW: Project Inthanon provides a blueprint for wholesale central bank digital currency and, in doing so, puts Bank of Thailand at the forefront of blockchain innovation in the financial services industry.  

The continued involvement of major Thai banks in Project Inthanon is the next step towards a production-ready solution on Corda and accelerates the growth of the Thai banking sector’s blockchain ecosystem. We are proud that Bank of Thailand, like many other central banks, has chosen Corda for its project.

Phase III of Project Inthanon will see the BoT collaborate with the Hong Kong Monetary Authority (HKMA) to explore the use of blockchain in cross-border fund transfers. By undertaking joint innovation projects, both regulatory authorities will benefit from the knowledge and experience gained from their respective applications. Collaborating in this way allows the APAC market to drive forward the development of tools to transform business operations.    

ABR: Digitizing real-world assets is one of the biggest growth areas in blockchain technology. Since many have said that the blockchain industry is stagnant in terms of lacking actual use cases, do you think the tokenization of underlying assets can ignite the success of the next phase of Project Inthanon?

CW: Tokenization, if developed appropriately, could simplify much of the asset issuance, execution, and trading processes that make up so much of investment banking fees today. Issuers of securities everywhere can unlock value in a more efficient, effective, and secure connection to those looking to allocate capital.

2020 will see an increased focus on the promise of tokenization, but the most important considerations for issuance are identity, security, data privacy, and settlement finality. R3 is uniquely positioned to facilitate the emergence of this ‘token economy’ in a secure manner, and these key aspects are already supported by Corda. 

 

ABR: Apart from working on Project Inthanon in Thailand, what are some of your other collaborations with governments in other countries?

CW: R3 has been fortunate to work with some of the world’s leading governmental bodies, collaborating closely with the Monetary Authority of Singapore (MAS) on Project Ubin, the Bank of Canada on Project Jasper, and the Hong Kong Monetary Authority on Project Lionrock, among others.

Recently, Project Ubin-Jasper concluded a successful trial that demonstrated the possibility of processing international payments without relying on a trusted intermediary. It established that payments can be securely transferred across different blockchain platforms, in this case, Corda and Quorum. This latest trial is one example of how Corda can usher in a new future for payment systems by bringing greater efficiency and speed to the current complex process. 

ABR: Can you tell us about other upcoming R3 projects for 2019-2020?

CW: Digital, tokenized assets will be another major chapter for R3 going forward. Corporates, banks, asset managers, and market infrastructure providers are partnering with us to build stable, regulated settlement assets on Corda. We launched the Digital Asset Working Group which has grown rapidly, helping our network design security token standards so that they can function seamlessly within the existing financial system. 

Asia is a hub for the investment and trade of valuable digital assets. The region has become a focal point for R3 to work with national regulators on the development of regulation and legislation for digital tokens, for example, the Monetary Authority of Singapore’s Project Ubin. 

Another key vertical expected to build further momentum this year is trade finance. HSBC has just announced the completion of the first yuan-denominated letter of credit using R3’s Voltron trade finance platform. This marks an important step forward for Voltron’s popularity as a commercially viable model for Asia-Pacific banks.  

As our footprint and headcount across the Asia-Pacific market continue to grow, we anticipate this next year will continue to demonstrate Corda as the most optimal enterprise blockchain available for global markets. 


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Asia Blockchain Review

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Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. We aim to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

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