Bank-backed R3 launches new version of its blockchain

[NEW YORK] R3 CEV, a New York-based company that runs a consortium of banks, has released a new version of its blockchain platform that it hopes will make it easier for financial firms to use the nascent technology.

The new version of the company's platform called Corda includes a feature that will make it easier for computer developers building applications with the technology to incorporate future upgrades and updates, R3 said on Tuesday.

Blockchain, which first emerged as the system underpinning cryptocurrency bitcoin, is a shared record of transactions updated by computers rather than a centralised authority.

Banks and other financial institutions have been investing in the technology for the past few years in the hope that it can be used to automate some of their back office processes such as securities settlement and regulatory reporting.

To accelerate development many have joined consortia or collaborative efforts.

Launched in 2015, R3 is the largest financial consortium focused on blockchain globally. Its members include more than 100 banks, regulators, trade associations and professional services firms.

In May it raised US$107 million in May from companies including Bank of America Corp, SBI Holdings, HSBC Holdings, Intel and Temasek Holdings.

R3 has been helping members develop prototypes and run experiments to test blockchain.

Most recently it announced that it had partnered with the UK's Financial Conduct Authority, the Royal Bank of Scotland and another global bank to develop an application using Corda to improve the regulatory reporting of mortgage transactions.

The new version of Corda, which is open-source, is expected to make it easier for developers to handle upgrades helping accelerate its adoption, said Richard Gendal Brown, chief technology officer of R3.

"There are a number of people who are building on this or have done live transactions," Gendal Brown said in an interview.

"What they get is certainty as they finalise their applications and move them into large scale production that they won't have disruptions."

While Wall Street's enthusiasm around blockchain remains high, some are warning that the technology is still young and its potential may be hyped. As it is in its infancy, blockchain has yet to bee used to run any large scale process in finance.

REUTERS