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Press Release

HQLAᵡ selects Corda for collateral lending solution in collaboration with R3 and five banks

5 April 2017 (New York/London/Singapore) – Financial innovation firm R3, five of its members and financial resource management specialist HQLAᵡ have built a collateral lending solution for liquidity transfers on R3’s Corda distributed ledger platform.

Project participants CIBC, Commerzbank, Credit Suisse, ING, UBS and HQLAᵡ collaborated with R3 to develop an operating model for a digital collateral receipt (DCR) lending marketplace. The model was built on R3’s Corda platform, a financial grade distributed ledger that records, executes and manages institutions' financial agreements in perfect synchrony with their peers.  

The project demonstrated the ability to create a digital collateral receipt lending market, designed to achieve the following benefits:

  • Help market participants redistribute liquidity more effectively and more cost efficiently 
  • Enhance regulatory transparency of collateral chains
  • Mitigate systemic risk by enabling orderly default unwinds 

The five project participants will continue working with R3 and HQLAᵡ to transform the proof-of-concept into a live pilot and subsequent production platform. As part of the flight path from laboratory to production, R3 and HQLAᵡ will engage the regulatory community to showcase the prototype and receive feedback for shaping the production ready platform.

David E.Rutter, CEO of R3, commented: “The implementation of new bank regulations for liquidity, mandatory clearing, and margin requirements for OTC derivatives has caused a significant increase in demand for high quality liquid assets. As a result, there is a heightened need for a marketplace that facilitates large scale, cost efficient collateral transfers across the global financial ecosystem, and Corda exceeded the most demanding requirements.”

Guido Stroemer, CEO of HQLAᵡ, commented: “The collaborative effort and proactive engagement by the project participants was truly impressive, and the value proposition to help shape the target operating model of the HQLAᵡ platform resonated strongly with the bank participants. This project is an excellent example of the R3 business model of testing use cases in its Lab and Research Centre in preparation for production ready deployment.”

Robin Green of CIBC Capital Markets comments: “We are excited to be involved in the development of a novel way to represent and exchange financial assets which has the potential to greatly improve market efficiency and reduce systemic risk. We look forward to taking this concept into the pilot and developing this innovative idea further.”

Thorsten Kanzler, Divisional Board Member Group Treasury at Commerzbank, commented: “The digital collateral receipt lending marketplace is an important step on our way to build up a digital Treasury product range. Once live, the lending place will support Commerzbank’s treasury in managing regulatory requirements even more cost efficient by facilitating collateral transfers on a distributed ledger technology platform. Thereby it allows us to enhance our integrated financial resource management by linking an HQLA exchange to the overall liquidity management of Commerzbank.”

Emmanuel Aidoo, Head of Blockchain and Distributed Ledger Technology Strategy at Credit Suisse, comments: “We made many important discoveries during this experiment – first and foremost was the realization that a blockchain-enabled marketplace for trading digital collateral receipts allows participants to redistribute liquidity more cost effectively and efficiently while enhancing regulatory transparency of collateral chains. This ultimately helps to mitigate systemic risk by enabling orderly default unwinds.”

Ivar Wiersma, Head of Wholesale Banking Innovation at ING, comments: “In line with our culture and our strategy, ING is eager to continue to collaborate and pursue this forward-thinking opportunity to progress HQLAᵡ to a live pilot phase, in line with our ambition to get distributed ledger technology out of the lab, and delivering tangible business value. This solution could provide bank treasurers with a new supply of non-cash collateral and offer more cost efficiency by optimizing balance sheet usage and liquidity management. Also, it can mitigate operational risks associated with securities delivery across fragmented securities systems.”

Gareth Allen, Global Head of Asset Sourcing & Optimization – Group ALM at UBS, comments: “Developing an operating model for a digital collateral receipt lending marketplace has the potential to be of real benefit to market participants. There's still plenty to do, but collaborating with HQLAᵡ and our peers – through R3 – to explore and drive efficiencies in the HQLA process is the right way to take this project from a proof-of-concept to live pilot, and possibly beyond.”

About R3

R3 is leading a consortium with over 80 of the world’s largest financial institutions to develop ground-breaking commercial applications for the financial services industry that leverage the appropriate elements of distributed and shared ledger technology.

Operating in New York, London and Singapore, the R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies.  

The R3 Lab and Research Centre has quickly become a centre of gravity for collaborative research and testing of distributed and shared-ledger inspired technologies, and is where R3 works with its partners to define, design and deliver the next generation of financial infrastructure.

About HQLA

HQLAᵡ, a partnership of financial market veterans and R3, is a financial innovation firm that specializes in providing financial resource management solutions to market participants. 

Press contact

R3:

Nick Warren/Nick Murray-Leslie

Chatsworth Communications

+44 (0)207 440 9780

contact@chatsworthcommunications.com

 

Charley Cooper

R3

+1 917 855 8529

charley@r3.com

Microsoft and R3 Partnership to Accelerate Adoption of Distributed Ledger Technology by Global Banks

For Release 7:30 a.m. PDT
April 4, 2016

Microsoft and R3 Partnership to Accelerate Adoption of Distributed Ledger Technologies by Global Banks

Deal will modernize technology and processes for the financial ecosystem, reducing costs and fraud; Microsoft Azure named preferred cloud platform for R3 Consortium.

April 4th, 2016 (New York/Redmond, Wash.) – Microsoft Corp. and the R3 Consortium today announced a strategic partnership that will accelerate the use of distributed ledger technologies, also known as blockchain, among R3 member banks and global financial markets. Distributed ledger technologies enable enterprises and business network participants to complete financial transactions with greater speed, security, cost-efficiency and transparency relative to solutions currently used. In addition, R3 named Microsoft Azure the preferred cloud services provider for its R3 Lab and Research Center serving more than 40 member banks.

Under the terms of the deal, Microsoft will provide cloud-based tools, services and infrastructure for R3 lab locations around the world, as well as dedicated technical architects, project managers, lab assistants and support services. R3’s global labs will drive faster experimentation, provide technical agility and accelerate learning as the financial services industry moves toward validated and certified distributed ledger technology implementations.

“With intelligent, cloud-based technology, R3 and member banks will experiment and learn faster, accelerating distributed ledger technology deployment,” said Peggy Johnson, executive vice president of global business development at Microsoft. “What’s more, our collaboration brings to light tremendous opportunities to rethink business processes and transform entire industries.”

“The partnership between Microsoft and R3 will scale the use of distributed ledger technology in a way that will change the entire financial services industry,” said David Rutter, CEO of R3. “The Azure platform and intelligent cloud services bring advanced capabilities to this budding financial ecosystem, and the commitment by Microsoft will accelerate the adoption of distributed ledger technology around the globe and take our R3 Lab and Research Center offering to a new level of capability.”

R3 and Consortium members will have access to Microsoft’s expanding ecosystem of BaaS partners including Ethereum and ConsenSys, Ripple, Eris Industries, Coinprism, Factom, BitPay, Manifold Technology, AlphaPoint, IOTA, BlockApps STRATO, Tendermint LibraTax, and many others that will aid in the development, testing and deployment of distributed ledger applications in cloud, hybrid and local environments.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.

About R3

 

The R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies. 

 

R3 operates in New York, London and San Francisco and with its partners to define, design and deliver the next generation of financial technology.

 

 

 

 

 

 

For more information, press only:

 

R3 Media Relations

 

Nick Warren

Chatsworth Communications

+44(0) 207 440 9780

nickwarren@chatsworthcommunications.com 

 

Microsoft Media Relations,

 

WE Communications for Microsoft

(425) 638-7777

rrt@we-worldwide.com

 

 

This press release is for information purposes only and are not intended to constitute, and should not be construed as, an offer to sell or a solicitation of any offer to buy any securities of R3CEV LLC (the “Company”) in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction.  The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Past performance does not guarantee future results in any respects.

 

Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the company’s core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events, (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) the extent of credit defaults, (v) interest rate levels, (vi) currency exchange rates including the Euro/U.S. Dollar exchange rate, (vii) changing levels of competition, (viii) changes in laws and regulations, (ix) changes in the policies of central banks and/or foreign governments, (x) the impact of acquisitions and commercial arrangements, including related integration issues, (xi) reorganization measures and (xii) general competitive factors, in each case on a local, regional, national and/or global basis.  Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

 

The Company assumes no obligation to update any forward-looking statement or update any information contained in the press release.

 

 

 

R3 completes trial of five cloud-based emerging blockchain technologies with 40 bank consortium members

Chain, Eris Industries, Ethereum, IBM and Intel participate in the most significant implementation of distributed ledger technology to date

March 3rd, 2016 (New York/San Francisco/London) – Financial technology innovation company R3 CEV has successfully trialed five distinct blockchain technologies in parallel in the first test of its kind. The trial represented the trading of fixed income assets between 40 of the world’s largest banks across the blockchains, using multiple cloud technology providers within R3’s Global Collaborative Lab.

The trial marked an unprecedented scale of institutional collaboration between the financial and technology communities exploring how distributed ledgers can be applied to global financial markets.

The banks connected to R3-managed private distributed ledger technologies built by Chain, Eris Industries, Ethereum, IBM and Intel. They evaluated the strengths and weaknesses of each technology by running smart contracts that were programmed to facilitate issuance, secondary trading and redemption of commercial paper, a short-term fixed income security typically issued by corporations to raise funding.  

Each of the distributed ledgers ran a smart contract based on identical business logic to enable the banks to accurately compare the difference in performance between them. Cloud computing resources were provided by Microsoft Azure, IBM Cloud and Amazon AWS to host the distributed ledgers.

David Rutter, CEO of R3, commented: “This development further supports R3's belief that close collaboration among global financial institutions and technology providers will create significant momentum behind the adoption of distributed ledger solutions across the industry. These technologies represent a new frontier of innovation and will dramatically improve the way the financial services industry operates, in much the same way as the advent of electronic trading decades ago delivered huge advancements in efficiency, transparency, scalability and security.”

R3 will continue to work with the banks in its Global Collaborative Lab over the coming months to test and develop applications based on distributed ledger technology for the financial services industry. The Lab has quickly become a center of gravity for collaborative applied blockchain efforts in the financial services and distributed ledger technology industries.

Tim Grant, Managing Director and Global Head of R3’s Collaborative Lab, commented: “In January we were able to demonstrate the ability to unite eleven global financial institutions on a private distributed ledger provided by Ethereum. With the completion of this trial we have raised the bar significantly with the sheer number of global financial institutions, distributed ledger technologies and cloud providers working together in parallel to demonstrate how this nascent technology can be applied to real-world financial markets processes by deploying smart contracts on an actively traded asset class. This represents great momentum for the R3 consortium and the technology providers and supports our aim to move distributed ledger technology from vision to execution.”

The distributed ledger technology providers commented on the successful project:

Adam Ludwin, CEO of Chain, said:  “Chain was pleased to bring its market leading blockchain platform and extensive experience serving the world’s largest financial institutions to this trial. Chain’s technology enabled forty leading banks to trial the issuance and trading of commercial paper on a blockchain network — simply, securely, and instantly. By undertaking initiatives such as this one, R3 is further accelerating the adoption of blockchain technology by demonstrating, instead of simply asserting, the commercial advantages of this emerging approach to financial services.”

Casey Kuhlman, CEO of Eris Industries, said: “The Eris platform is designed to make it fast and easy for developers to create applications using any blockchain or other distributed systems. In this experiment our open-source tools successfully deployed suites of smart contracts on both a fully-permissionable ErisDB blockchain and an instance of a Go-Ethereum private blockchain. It was a pleasure working with R3 and we look forward to future experimentation.”

Vitalik Buterin, Ethereum Founder, said: "Although "the" Ethereum blockchain is a public blockchain, it is great to see private and consortium blockchains using the Ethereum codebase actively under development. I’m delighted to support the R3 consortium's participation in the evaluation and development of the Ethereum platform through this trial. The smart contract capability used in this trial allows developers to encode any "rules" that the blockchain will enforce, allowing anything from simple asset issuance to highly complex financial derivatives to be implemented on the platform."

James Wallis, Vice President Blockchain, Global Industries, IBM said: "Blockchain is a powerful innovation that has the potential to create profound change in the way businesses interact. Using IBM Blockchain services, a blockchain network was deployed within minutes, allowing the developers to rapidly focus on building a sample application for trading unsecured promissory notes within hours. Working with R3 and others, IBM is building technology that is both easy to use and supports the broad adoption of blockchain, through our own innovations and in collaboration with the open source community at large."

Kelly Olson of Intel’s New Technology Group said: “Intel is excited to give the R3 members the opportunity to evaluate our software in advance of its open source release. Intel processor technologies like Intel® Software Guard Extensions (Intel® SGX) provide unique capabilities that can help enable improved security and scalability for distributed ledger networks.”

The R3 member banks involved in this trial included Banco Santander, Bank of America, Barclays, BBVA, BMO Financial Group, BNP Paribas, BNY Mellon, CIBC, Commonwealth Bank of Australia, Citi, Commerzbank, Credit Suisse, Danske Bank, Deutsche Bank, Goldman Sachs, HSBC, ING Bank, Intesa Sanpaolo, J.P. Morgan, Macquarie Bank, Mitsubishi UFJ Financial Group, Mizuho Financial Group, Morgan Stanley, National Australia Bank, Natixis, Nordea, Northern Trust, OP Financial Group, Royal Bank of Canada, Royal Bank of Scotland, Scotiabank, SEB, Societe Generale, State Street, TD Bank Group, UBS, UniCredit, U.S. Bank, Wells Fargo and Westpac Banking Corporation.

About R3

The R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies. 

R3 operates in New York, London and San Francisco and with its partners to define, design and deliver the next generation of financial technology.

 

R3 brings eleven major global financial institutions together on a cloud based distributed ledger

Transition from vision to execution signifies commitment to practical application of distributed ledger technology

 

January 20th, 2016 (New York/San Francisco/London) – Financial technology innovation company, R3 CEV, today announced the successful completion of a ground breaking distributed ledger experiment involving eleven of the world’s largest financial institutions. 

R3 and consortium member banks Barclays, BMO Financial Group, Credit Suisse, Commonwealth Bank of Australia, HSBC, Natixis, Royal Bank of Scotland, TD Bank, UBS, UniCredit and Wells Fargo each connected on an R3-managed private peer-to-peer distributed ledger, underpinned by Ethereum technology and hosted on a virtual private network in Microsoft Azure, the public cloud platform offering Blockchain as a Service (BaaS) in an accelerated development environment.

Participants were able to explore the technology’s potential to execute financial transactions instantaneously across the global private network. The banks simulated exchanging value, represented by tokenized assets on the distributed ledger without the need for a centralized third party.

In bringing a significant number of major banks onto a multi-lateral distributed ledger with global scale, the experiment – which was curated in the R3 Global Collaborative Labs (GCL) environment – represents a significant milestone in collaboration for the R3 consortium and a major step forward for the application of distributed ledger technology across the entire industry.

This collaborative experiment is the first in a series of projects, using a range of candidate distributed ledger technologies, and is designed to prove suitability of distributed ledgers for financial markets use cases. R3 will be announcing a series of additional projects borne out of its collaborative lab workshops over the course of 2016.

David Rutter, CEO of R3, commented: “The transition from vision and hypothesis to application and execution signifies the next major step towards using this technology to transform how institutions interact, report and trade with each other in financial markets.  This is a very exciting development, both for R3 and our member banks, as well as the global financial services industry as a whole.”

 

Since launching its distributed ledger consortium in September last year, R3 has been running industry collaborative joint working groups with its 42 member banks to design and deploy advanced shared ledger technology in the global financial sector, incorporating multiple open source technologies and standards. 

 

Several of the banks involved in the effort commented on the experiment:

 

“As we progress our evaluations of shared ledgers and smart contracts, we look forward to leveraging R3’s lab environment for collaborative technology experiments,” said Brad Novak, Chief Technology Officer for the Investment Bank at Barclays. “Ethereum is a well-known open source technology in this space and we also look forward to collaborative experiments using other technologies.”

 

“We innovate with the objective of providing effective, secure and convenient solutions to meet our customers’ needs,” said Cameron Fowler, Group Head, Canadian Personal and Commercial Banking, BMO Financial Group. “The successful completion of this experiment validates the potential of blockchain technology and we will continue to play a meaningful role in its development, along with our partners in R3.”

 

“Blockchain is an emerging focus for our industry and Credit Suisse. As one of the early participants with R3 we are very happy to be part of the consortium which leads the industry’s research into the value and applicability of this technology”, said Stephan Hug, Group Chief Architect, Credit Suisse. “We feel it is critical to be engaged to identify the opportunities that innovative technologies like this provide and ensure we maintain our position as a globally leading financial institution.”

 

“The new R3 globally accessible lab environment is enabling both R3 and member banks to collaborate technically on experiments related to shared ledger and smart contracts technology.  As demonstrated by the first project that is already up and running, this lab platform will aid faster experimentation, provide technical agility and aid learning greatly,” said Richard Herbert, CIO, Global Banking and Markets, HSBC.

“Blockchain technology represents a fundamental shift for financial services, and we think it is important to be close to the technology being developed. Natixis is glad to cooperate with R3CEV and consortium member banks to enable and accelerate this transformation with a collaborative approach. This experiment is a significant milestone to bring this technology to market and it underscores our long-standing commitment to explore technology that has the potential to greatly enhance our customers' experience”, said Olivier Perquel, Head of Financing and Global Markets for the Corporate and Investment Bank of Natixis.

Kevin Hanley, Director of Design, Services, at Royal Bank of Scotland commented: “We continue to be excited about the possibilities that blockchain offers and encouraged with the progress that we are making with others through our involvement with R3 and GCL.”

 

"At TD, we have an ongoing commitment to technical innovation. To be successful, we need to collaborate in the spaces that allow us to provide continued excellence for our customers," says Jeff Henderson, EVP and CIO for TD Bank Group.  "Blockchain and R3's initial project is a sign of our industry's willingness and ability to transform; TD is playing a leadership role in shaping our industry's future."

"Proving the scale and peer-to-peer operation of blockchain experiments is an important next-step in this transformational initiative. Through connecting 11 bank labs into a simulated-real-world network, we're able to establish the platform we need to test our theories effectively in a safe environment," added Alex Batlin, UBS Senior Innovation Manager

“The kick-off of this project, within the R3 Global Collaborative Labs initiative, is another step forward for UniCredit in the evolutionary path undertaken in order to exploit the benefits of blockchain technology, which represents a powerful enabler to keep playing a leading role in the financial services arena” said Paolo Fiorentino, Deputy General Manager of UniCredit.

 

 

About R3

 

The R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies. 

 

The banks involved in the project include Banco Santander, Bank of America, Barclays, BBVA, BMO Financial Group, BNP Paribas, BNY Mellon, CIBC, Commonwealth Bank of Australia, Citi, Commerzbank, Credit Suisse, Danske Bank, Deutsche Bank, J.P. Morgan, Goldman Sachs, HSBC, ING Bank, Intesa Sanpaolo, Macquarie Bank, Mitsubishi UFJ Financial Group, Mizuho Financial Group, Morgan Stanley, National Australia Bank, Natixis, Nomura, Nordea, Northern Trust, OP Financial Group, Scotiabank, State Street, Sumitomo Mitsui Banking Corporation, Royal Bank of Canada, Royal Bank of Scotland, SEB, Societe Generale, Toronto-Dominion Bank, UBS, UniCredit, U.S. Bancorp, Wells Fargo and Westpac Banking Corporation.

 

R3 operates in New York, London and San Francisco and with its partners to define, design and deliver the next generation of financial technology.

R3’s distributed ledger initiative grows to 42 bank members and looks to extend reach to the broader financial services community

Next phase of engagement to start in January and focus on non-bank institutions

December 17, 2015 (New York/San Francisco/London)Financial innovation company R3 has concluded its distributed ledger bank membership round with the addition of 12 new banks, bringing the total number to 42.  Since its September launch, the company has seen a groundswell of interest in the consortium from financial services companies around the world.  

Having built a network that includes most of the world’s major global banks, and with the window for the admission of new bank members having closed under the consortium’s formative agreement, R3 will now focus efforts on broader engagement with a diverse range of institutions outside of the banking industry.  As part of that initiative, R3 is considering options for participation in the consortium by various categories of non-bank institutions after the first of the year. 


R3 assembles expert technology team to lead distributed ledger initiative

Today’s staffing announcement coincides with the addition of five more banks to R3’s distributed ledger initiative – BNP Paribas, Canadian Imperial Bank of Commerce, ING Bank, Macquarie Bank, and Wells Fargo & Co. – bringing the total number of bank members to 30.

R3’s distributed ledger initiative adds 13 additional bank members

Initiative to advance state-of-the-art technology in global financial markets now comprises 22 banks

September 29, 2015 (New York/San Francisco/London) – Financial innovation firm R3 today announced that an additional 13 of the world’s leading banks have joined its partnership to design and apply distributed ledger technologies to global financial markets.  The news comes two weeks after R3 and nine initial member banks publicly announced the formation of their distributed ledger initiative.  

This addition, which takes the total number of banks collaborating on the project to 22, includes Bank of America, Bank of New York Mellon, Mitsubishi UFJ Financial Group, Citi, Commerzbank, Deutsche Bank, HSBC, Morgan Stanley, National Australia Bank, Royal Bank of Canada, SEB, Societe Generale and Toronto-Dominion Bank.

These institutions will join Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, Goldman Sachs, J.P. Morgan, Royal Bank of Scotland, State Street and UBS in developing commercial applications for this emerging technology in the global financial services industry. The project will also seek to establish consistent standards and protocols for the technology in order to facilitate broader adoption and gain a network effect.

Financial innovation firm R3 to spearhead crypto technology solutions for the multi-trillion dollar financial services sector

September 15, 2015 (New York/San Francisco/London) – Nine of the world's leading banks today announced the formation of a partnership to design and deliver advanced distributed/shared ledger technologies to global financial markets.  The project – in addition to developing commercial applications – will seek to establish consistent standards and protocols for this emerging technology across the financial industry in order to facilitate broader adoption and gain a network effect.  Led by financial innovation company R3, the partnership is comprised of a group of banks including Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, J.P. Morgan, State Street, Royal Bank of Scotland and UBS.  R3 CEO and former ICAP Electronic Broking CEO David Rutter will lead the project, and more banks are expected to pledge their support in the coming weeks.