Fintech company R3 is mulling moving its Corda solution to the Hyperledger blockchain platform.
In an interview with GTR, Brian Behlendorf, the executive director for open-source blockchain consortium Hyperledger, said the platform is “a neutral home for the technology and a way to turn it into a multi-vendor technology, rather than make it R3-specific technology”.
He confirmed that talks have been held “about bringing Corda over to Hyperledger”, but said nothing has been decided as yet. “We’re all waiting, like everyone else, to see where they come out of that,” Behlendorf says.
Corda is a shared ledger platform developed by a consortium of more than 70 leading financial institutions, brought together by R3, a New York-based fintech company. Last year, the platform facilitated invoice financing and letter of credit transactions in trials with more than 15 banks.
It was developed specifically for transaction banking to provide smart contracts that will allow parties to better manage agreements, and to reduce costs and risk in trade.
Many trade finance banks have thrown their lot in with R3, while others – including HSBC, Bank of America Merrill Lynch and Yes Bank – continue to develop pilots on Hyperledger.
Hyperledger, meanwhile, provides the platform on which much of the blockchain pilots and solutions in trade finance to date have been developed. R3 has been a member of the Hyperledger consortium since the beginning, and Behlendorf describes it as an “active and credible participant”.
R3 confirmed in October 2016 that it was to make the code for Corda open source. At the time, R3’s chief engineer said: “We want other banks and other parties to innovate with products that sit on top of the platform, but we don’t want everyone to create their own platform… because we’ll end up with lots of islands that can’t talk to each other.”
The company declined to comment on the story when contacted by GTR, however Behlendorf’s comments suggest that the organisations have mooted the possibility of making their relationship more formal.
Behlendorf says that while he has not had a chance to “dive into the code of Corda”, he understands that it is different from the distributed ledger technology of blockchain.
R3 is using shared ledger, which means it gives participants more control over confidential and proprietary information.
Associate director at R3, Clemens Wan, explained the difference in an online forum: “By default, information about transactions is only shared with those parties to a transaction. This is a more appropriate model for ﬁnancial services, where privacy of transactional data is highly important. If signatures are present from all parties to a transaction, then we assume that the transaction is agreed upon and consensus is achieved.”
However, Behlendorf says Corda is interesting to him, because it differs from all the other ledger technology available right now.
“My understanding is that it’s very particular to specific use cases in finance, whereas most of the rest of the tech we’re building at Hyperledger is very non-sector-specific. In the same way we don’t have an industry-specific operating system, for example, industry-specific networking gear. I see them look to generalise Corda to other domains like healthcare, that’s interesting to me,” he says.
Blockchain and ledger-based solutions are often billed as the answer to many issues in the trade finance business, including fraud prevention, automation and speed of transactions.
Many have speculated, however, that in the future, the disparate solutions being developed across different platforms – most notably Corda and Hyperledger Fabric – would have to integrate, if blockchain is to become a viable industry-wide prospect.
While no details have been confirmed about this potential integration, a distributed ledger solution which provides the confidentiality promised by Corda would certainly be welcomed by banks.