R3 announces eight core areas of blockchain technology testing

R3 reviewed eight major areas of blockchain research at the Blockchain and Distributed Ledger Conference, including interoperability, payment, settlement, financial transactions, corporate bonds, repurchase, swaps and insurance. Participants included regulators, product developers, law enforcement lawyers and other financial industry representatives. At the conference, Jacob Farber, the current general counsel of R3 who previously worked at the law firm Perkins CoieIDE, pointed out that the technology will only be used for sub-services in the research field and will not replace the original services.

Translation: Annie_Xu

A blockchain consortium of more than 40 financial institutions around the world is testing at least eight proofs-of-concept (PoCs) to explore ways that distributed ledgers can simplify many Wall Street transactions and facilitate regulation.

Speaking at the Blockchain & Distributed Ledger Conference, an R3CEV executive listed eight areas where his startup’s proof-of-concept research is working: interoperability, payments, settlements, financial transactions, corporate bonds, repo, swaps and insurance.

The more than 50 attendees included regulators, product developers, law enforcement attorneys, and other financial industry representatives.

Speaking at the event, Jacob Farber, General Counsel of R3, said:

“We have a lot of financial institution groups participating in proofs of concept or doing proof of concept research in these areas.”

R3 previously revealed plans for the Corda project, a distributed ledger focused on the unique privacy requirements of financial institutions.

Disruption, not replacement

Farber, who formerly worked at law firm Perkins Coie, which co-hosted the conference with American Express, stressed that research projects in these areas are not intended to replace all existing systems.

Instead, proofs of concept will be used for sub-service projects in these areas and efforts will be made to write them to the distributed ledger.

Farber also singled out some very attractive application areas, including post-trade reporting, reference data and regulatory data provision.

“Blockchain technology has many interesting applications, but it is far from enough to replace the entire industry process.”

Smart Contracts

Farber also discussed the concept of “smart contracts,” which describe legal contracts that live on a blockchain and codify responsibilities for predetermined events to occur.

“People call them smart contracts, which I hate because they’re not really contracts, and they’re not smart.”

Likewise, during a panel discussion on the same topic the previous day, Patrick Murck, a staff member at Harvard's Berkman Center for Internet & Society and executive director of the Bitcoin Foundation, said he hated the term, which was coined by Nick Szabo in 1997.

Patrick Murck

Murck proposed that they should be called "programmatic transactions" because these contracts always have a traditional contract counterpart and can be mechanically executed using traditional technology.

Hosted by the American Conference Institute, the conference covered a wide range of topics, including law enforcement, the place of regulators in the blockchain space, and the characteristics of smart contracts.