Several dozen banks and other financial institutions are focusing their attention on incorporating distributed ledger technology in their existing infrastructure. While there are several different ways to use the blockchain for economic needs, one of the first projects to be thoroughly tested comes in the form of bond trading using distributed ledgers. This concept will be an interesting test for the capabilities of R3 CEV as a blockchain consortium.
Also read: Bitcoin Price Watch; Downside Takes Charge R3 CEV Meets Banking Infrastructure
The new project saw forty major banks to verify a system for the trading of fixed income using blockchain technology. Among the institutions testing this solution are prominent names in the banking industry, such as Citi and HSBC , both of whom are a part of the R3 CEV consortium.
Many people have been touting the Bitcoin blockchain as revolutionary technology in the financial world, even though distributed ledgers can serve multiple purposes in the long run. Exchanging data over the blockchain is secure and takes place in real-time, and it is of great interest to established financial players.
However, it is important to note R3 CEV and partners do not use the Bitcoin blockchain directly, but rather own versions of the same technology. On paper, such a private blockchain operates in a similar fashion to the Bitcoin distributed ledger, although it removes the need for mining capacity to keep transactions moving along.
What is of particular interest to financial players is the concept of using smart contracts. A smart contract will let parties execute operations automatically, as the outcome is verified by software, rather than humans acting as an intermediary. Trading fixed income is a good way to test the viability of this approach, especially when considering how five different blockchain technology providers have been used.
R3 […]
