World’s largest banks and R3 build blockchain-based payments system

Fintech firm R3 heads the consortium in the development of an international payments system

Distributed ledger technologies such as Corda have the potential to streamline cross-border payment processes

On October 31, fintech firm R3 and 22 of the world’s biggest banks announced the development of a new international payments system. Corda, R3’s distributed ledger platform, manages legal agreements between businesses, updating in real time and processing transactions quickly with the help of computer algorithms.

Corda doesn’t require manual processing or third-party verification and so both commercial and central banks recognise its potential to make international transactions a far smoother process.

Both commercial and central banks recognise Corda’s potential to make international transactions a far smoother process

Frederic Dalibard, Head of Digital for Corporate and Investment Banking at Natixis, one of the banks involved in the project, said: “Natixis believes in the potential of distributed ledger technology for cross-border payments and is exploring several initiatives in that space,” according to Reuters.

“This is a significant moment for the evolution of distributed ledger technology,” Ricard Gendal Brown, CTO of R3, told the International Business Times. “Most other platform providers don’t commit to this.”

A consortium of heavyweight banks led by R3, will see the likes of Barclays, HBSC, Bank of America Merrill Lynch, JP Morgan, Credit Suisse and Commerzbank adopt the new ledger platform.

Blockchain technology is seen by many financial experts to herald a new era for financial operations. While central banks all over the world point out that blockchain is still not developed enough to be a universal currency platform, various world banks have backed the software – via the R3-led consortium – because of its potential to facilitate smoother transaction processes.