R3, a global consortium of banks founded by former banking executives to create a distributed financial ledger, has announced another round of banks entering the initiative. 13 additional banks are joining the initial 9 firms that collaborate on the project.
Now a collaboration that includes 22 banks, the goal of R3 is to create a distributable ledger using blockchain technology that can be scaled to provide suitable services for the financial industry. Among the tasks of R3 is developing methods to integrate existing facets of the financial industry such as recording asset ownership, reporting trades and handling settlements within a public blockchain.
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Joining the original nine banks are: Bank of America, BNY 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. Among them include several firms such as Citi and Deutsche Bank that have also launched proprietary initiatives for the use of blockchain technology within their own companies for internal needs and to support customers.
An interesting aspect of R3 is that its co-founders, David Rutter and Jesse Edwards, are simultaneously working on another project, LiquidityEdge, a trading platform for US Treasury securities. A similarity between R3 and LiquidityEdge is use of network effect models, becoming more important as the projects scale to a larger audience. In addition, both initiatives include overlapping bank partners.
With regard to the current R3 news, David Rutter stated: “We have placed an emphasis on working with the market from day one, and our partners recognise that a collaborative model is the best way to quickly, efficiently and cost-effectively deliver these new technologies to global financial markets.”