[Pencil exclusive interview with R3] Currently progressing well, Corda will be the first to open source in China today

Reporter: Lydia

After the news that Goldman Sachs and Spain's Santander Bank withdrew from the R3 blockchain alliance, relevant people have speculated that more banks will choose to withdraw from R3, and various media have been digging deep and competing to report on the circumstances and reasons that affected the R3 alliance's $150 million financing. In order to verify the authenticity of such reports that are everywhere on the Internet, the reporter of Blockchain Pencil interviewed R3 insiders.

According to an insider of the R3 blockchain alliance, it has been confirmed that at least 35 banks are willing to participate in this financing and will continue to join. Even so far, only four banks have actually withdrawn. And as for the financial institutions that have withdrawn, it is not because they are not optimistic about blockchain technology, but because they are still involved in the research and development of blockchain technology.

The person said that many alliance members do not have too many concerns about the future development of R3, and those who question the R3 blockchain alliance, or even believe that blockchain technology is gradually being neglected, are all groundless worries.

We cannot deny R3 completely just because a few institutions have left. As R3 responded earlier, developing technology of this scale requires long-term investment and a lot of resources, and our members come from different industries and have different abilities, which will change over time. These individual actions can be treated rationally.

According to the insider who did not want to be named, the progress of R3 has far exceeded the original expectations. Most companies have recognized the current progress in the process of cooperation with R3. Only a few companies have readjusted due to their own strategies. Many media have repeatedly emphasized and exaggerated the departure of a few companies, but have not pointed out that more companies are strengthening their cooperation with R3, and even believe that this is a setback in the development of the blockchain industry, which is obviously nonsense.

Corda system will be the first to be open source in China

The R3 Corda private chain platform was developed by R3CEV specifically for traditional financial institutions with huge transaction volumes. After more than 70 alliance members negotiated and decided to formulate blockchain standards, it was finally officially implemented as open source.
Although the main purpose of Corda open source is to establish industry standards for the blockchain market, R3CEV said it hopes other companies will use the open source code and Corda to build new and innovative applications.
Now many people have understood the complexity and advancedness of blockchain platforms. This is not just a technical difficulty. Economic and political issues are usually considered key factors in the development stage. Therefore, whether it is a startup or a large group, it is still quite time-consuming and costly to develop a flexible and secure blockchain platform.

James Carlyle, Chief Engineer at R3, said:

“We want other banks and institutions to innovate products on this platform, but we don’t want everyone to create their own platform…because if we do that, we will end up like islands that can’t communicate with each other. If we have a lot of product development concentrated on our platform, then the platform will be like the Internet, where you can innovate independently but also stay connected to each other.”

Corda’s code will be made available on November 30 to the Hyperledger project, a cross-industry effort led by the nonprofit Linux Foundation that aims to improve blockchain technology with universal standards.

Due to the time difference, Corda will be the first to be open sourced in China today.

The role of blockchain in banks is unquestionable

Blockchain technology, best known for powering the bitcoin transaction system, is gaining traction as banks look to use it to speed up transactions, cut operating costs and make banking and other infrastructure more secure, potentially saving billions of dollars.

Supporters of blockchain technology believe that the technology will reduce the hidden costs of the financial system, improve transaction efficiency, reduce the demand for transaction insurance, and strengthen its application in payment, trade finance, syndicated loans, equity liquidation and other fields. This technology, which can reduce bank operating costs on a large scale, is very popular among banks in the current context of ultra-low interest rates and regulatory increases in capital requirements.

On November 14 last year, 10 R3 members successfully tested a KYC (Know Your Customer) registration system based on a distributed ledger. As a shared platform between banks, the registration system can create and manage digital identities and provide a KYC management mechanism for the financial sector. This move can not only use blockchain technology to share physical transaction information between banks and reduce a lot of duplication of work, but also protect financial institutions and reduce unnecessary transaction risks.

In April this year, the R3 Alliance released Corda, a distributed ledger platform for financial institutions, which is used to record, manage and synchronize financial agreements between regulated financial institutions.

In order to meet the regulatory requirements of anti-fraud and anti-money laundering, commercial banks in various countries have to increase their investment costs in compliance. This cost cannot generate profits for banks and is a complete burden. Therefore, if blockchain technology can save banks a lot of repetitive work, record and update user data in a timely manner, and realize encrypted sharing and monitoring of abnormalities, it can greatly save bank operating costs.