Corda Blockchain platform based Solution Completes Live Commercial Paper Transaction

Built on R3’s blockchain platform, Corda, the Euro Debt Solution application has successfully completed a live commercial paper transaction.

R3 partnered with German banking and financial services company, Commerzbank, ING, French corporate and investment bank, Natixis and Dutch financial services firm, Rabobank for completing this transaction. Commerzbank developed the pilot framework, software and distributed ledger (DLT) network for the trade, and instructions on regulatory implications.

An earlier version of the solution simulated blockchain based transaction in September 2017 and then onwards all parties worked towards establishing an operational structure and worked closely with external legal counsel Allen and Overy to develop a comprehensive legal framework, the announcement said.

Each participant had a predefined role in the transaction. With an issuer role, Natixis reportedly issued notional 100,000 euro with one-day maturity. Rabobank role was the investor. Role of ING was as both dealer and escrow agent.

Corda is open-source distributed Ledger Technology (DLT) project launched in 2016. It is similar to Ethereum or IBM Hyperledger Fabric if we have to compare. Its other competitors include J.P Morgan’s Quorum, Tezos, NASDAQ’s Linq or Chain etc.

In November 2018, India's biggest business Reliance successfully conducted its Blockchain Trade Finance Transaction.

Executive Opinion

Chief Executive Officer, R3, David E. Rutter, said, “The issuance and settlement of securities is a complex process and current models are rife with inefficiency. Corda addresses these challenges by enabling parties to financial agreements to record them once and collaborate to maintain accurate, shared records of these agreements. The successful live trade on the Euro Debt Solution not only demonstrates that blockchain provides clear advantages over existing processes but marks the next step towards a production-ready solution on Corda.”

Head of Digital for Corporate & Investment Banking at Natixis, Frédéric Dalibard, said, “The flawless execution at every stage of this transaction is extremely encouraging, Natixis will continue to work closely with R3 and our consortium partners to push towards a full commercial launch of the solution. It promises impressive advances in operational efficiency, and we are delighted to be involved in this exciting project.”

The announcement further noted that all the participants will continue to pursue development efforts for the solution to bring greater transparency to the marketplace, reduce operational cost and risks, in delivering intraday settlement finality for their clients.