The R3 blockchain consortium, representing over fifty major corporations from around the world, is leading a group of banks and other institutions to develop master templates for smart contracts. Barclays and the International Swaps and Derivatives Association (ISDA) are among those collaborating in exploring smart contracts operating on distributed and shared ledgers.
The group explains that its longer term goals include working with the legal community and academics to investigate how to take smart contracts to a point where they can be admissible in court and used for entry into dispute resolution.
Richard Brown, Chief Technology Officer at R3, commented: “The promise of distributed ledger technology is that we can move to a world where sophisticated financial agreements between firms can be recorded and managed consistently and accurately without duplication, error or unnecessary cost. However, for this vision to be realized, more than just innovative technology is required: this technology must be embedded in a broader legal context and be sympathetic to the reality of business.”
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Dr. Lee Braine, Investment Bank CTO Office at Barclays, said: “Barclays has been actively engaging in the blockchain field for two years, including experimenting with vendor products, supporting innovative startups via the Barclays Accelerator, and participating in industry consortia such as the R3 consortium and the Post-Trade Distributed Ledger Group.
This year, Barclays Investment Bank has explored smart contracts in greater depth by leveraging its technology, legal and front-office teams – and collaborating with industry and academia through open innovation. In April, we demonstrated a Smart Contract Templates prototype creating an ISDA agreement and an interest rate swap trade that then executed as a smart contract on R3’s prototype Corda platform.”
Clive Ansell, Head of Market Infrastructure and Technology at ISDA, added: “Technology is becoming ever more important in derivatives markets, as participants look for ways to enhance the efficiency of their operations. ISDA is committed to supporting innovations in technology, and smart contracts represent one area where considerable opportunity exists. ISDA’s existing suite of derivatives documentation, developed over many years, provides a basis to explore this further.”