The R3 Consortium
Many banks have invested in building blockchain prototypes — many for Know Your Customer (KYC) requirements for anti-money laundering and prototypes for reducing the cost of exchanging money. They have to overcome several challenges, including the security of private information and the regulatory gray zone of cryptocurrencies.
R3 is an innovative company that has built a consortium with more than 75 of the world’s leading financial institutions to integrate and take advantage of new blockchain technology. R3 is improving cross-border exchange, lowering the cost of auditing, and improving the speed of interbank fund transfer and settlement.
R3’s three pillars are as follows:
- Financial-grade blockchain: R3 has developed the base layer technology that supports a global financial institution’s needs.
- Research and development: R3 has created a bilateral research center that is testing and creating industry standards for commercial-grade blockchain technology.
- Product development: R3 works in close collaboration with institutions to create products that solve problems up and down the value chain.
R3 has developed a blockchain platform for financial institutions called Corda. Corda is a distributed ledger platform designed to manage and synchronize financial agreements between regulated financial institutions. Unlike most blockchains that broadcast their transactions to the whole network, transactions may execute in parallel, on different nodes, without either node being aware of the other’s transactions. The history of the network is on a need-to-know basis.
Key features of Corda include the following:
- Controlled access: Only parties with a legitimate need to know can see the data.
- No central controller.
- Regulatory and supervisory observer nodes.
- Validation by parties to the transaction rather than a broader pool of unrelated validators.
- Support for a variety of consensus mechanisms.
- No native cryptocurrency.