Corda blockchain has once again reaffirmed its credentials as an alternative means of completing transactions in the financial sector. Four international banks- ING, Commerzbank, Rabobank, and Natixis– have completed a commercial paper transaction, reaffirming another Corda use case.
Corda-based Euro debt Solution is the application that facilitated the transaction between Rabobank, ING, Commerzbank, and Natixis. The transaction resulted in the issuance of a commercial paper worth €100,000. Natixis was the issuer of the commercial paper as Rabobank assumed the investor role. ING played the role of escrow agent as Commerzbank provided tech support for the transaction.
With the help of Corda blockchain, the four banks were able to speed the entire transaction process. They were able to reduce operational costs significantly, while also reducing transaction risks. According to Marnix Burnin Head of Money at the market at ING, the transaction marks the first step of building an improved DLT platform for direct settlement.
Issuance, settlement, and securities are still a complex process. However, with the use of new blockchain solutions such as R3’s Corda blockchain, the hustles could soon be a thing of the past.
“The successful live trade on the Euro Debt Solution not only demonstrates that blockchain provides clear advantages over existing processes but marks the next step towards a production-ready solution on Corda,” said R3 CEO David E. Rutter.
Blockchain in finance
Corda blockchain is the latest project looking to give Ripple a run for its money in the financial sector. Build by R3, Corda is positioning itself as an alternative mean of enabling real-time transactions at low costs. They aim to make it easy for businesses to build interoperable blockchain networks for direct and real-time transactions.
After the successful use cases, Corda blockchain could find increased interest as financial institutions continue to explore blockchain. Brazil’s largest private bank Itau Unibanco has already collaborated with Standard Chartered to create blockchain platform for small loans.
The two have already completed a proof of concept of their innovation on R3’s Corda Connect. Likewise, Saudi Arabia’s Islamic Development Group has also teamed up with iFinTech Solution to develop interbank tools based on a blockchain, providing another Corda use case.