Blockchain’s entrance into the institutional trading world continued this Thursday with several banks completing a commercial paper transaction using the technology. Enterprise technology company R3, which built blockchain platform Corda, worked with Commerzbank, ING, Natixis, and Rabobank to facilitate the transaction.
The trade took place on the Euro Debt Solution application, a system built on the Corda blockchain, and follows on the heels of an equivalent demo transaction that took place in September of last year. Unlike many other blockchain networks, Bitcoin’s for example, Corda was designed explicitly for companies. When designing it, R3 placed a heavy emphasis on privacy and an ability to make transactions and transmit contracts over it.
“The successful live trade on the Euro Debt Solution not only demonstrates that blockchain provides clear advantages over existing processes,” said David E. Rutter, CEO of R3, “but marks the next step towards a production-ready solution on Corda.”
Staying Ahead: How Brokers Are Approaching 2020Go to article >>
Natixis Issuer, Rabobank Investor, and ING the dealer
In the deal that took place this Thursday, Natixis acted as issuer and Rabobank as the investor. ING was both the dealer and escrow agent. The trade saw EUR 100,000 notional being issued with a one-day maturity.
Along with R3, Commerzbank provided the pilot framework, software and distributed ledger network for the trade. The German bank also advised on the regulatory implications of the trade.
Legal firm Allen and Overy were also involved in the deal. Providing legal advice, the London-based firm developed, according to a statement released by R3, “a comprehensive legal framework” for the transaction to take place.
“The flawless execution at every stage of this transaction is extremely encouraging, Natixis will continue to work closely with R3 [and] our consortium partners to push towards a full commercial launch of the solution,” said Frédéric Dalibard, Head of Digital for Corporate & Investment Banking at Natixis. “It promises impressive advances in operational efficiency, and we are delighted to be involved in this exciting project.”