Eleven banks successfully tested a private blockchain, exchanging multiple tokens among offices in North America, Europe and Asia over five days, the R3CEV LLC consortium said Wednesday.
“I see it as a significant but simple first step in what, hopefully, is many more and larger steps to come,” said Jeff Henderson, CIO of TD Bank Group, one of the 11 participating banks.
The test, conducted Jan. 11 to Jan. 15, allowed the banks to connect to a private distributed ledger built on open-source blockchain technology from Ethereum and hosted on a Microsoft Corp.’s Azure cloud. The tokens, or software code representing a theoretical asset, passed between nodes set up by the banks and R3 with no problems, a spokesman for the consortium said in an email. The data about the tokens was intact and the validity of each transaction verified “instantaneously” by all nodes, he said.
R3 is a consortium of 42 banks working to design and apply distributed ledger technologies to global financial markets.
Part of the appeal of blockchain, the distributed ledger technology that underpins Bitcoin, is the ability to settle transactions in seconds or minutes automatically via computers. This is a faster, potentially more secure settlement process than is used today among financial institutions, where clearing houses and other third-parties validate accounts and identities over a few days.
“The test was relatively modest,” Mr. Henderson said. “But it did prove that in a private, controlled environment, the banks can collaborate.”
R3 expects to test the blockchain among all 42 member banks this year, the spokesman said. Others participating in the initial test were Barclays PLC, BMO Financial Group , Credit Suisse Group AG, Commonwealth Bank of Australia Ltd., HSBC Holdings PLC, Natixis , Royal Bank of Scotland Group PLC, UBS Group AG, UniCredit SpA and Wells Fargo & Co.
Although the test used […]
