Thirteen more top banks join R3 blockchain consortium

Tue Sep 29, 2015 11:28am EDT
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By Jemima Kelly

LONDON, Sept 29 (Reuters) - Thirteen top banks, including HSBC and Deutsche Bank, have joined a consortium led by financial tech firm R3 that is working on a framework for using blockchain technology in markets, a spokesman for the firm said on Tuesday.

Nine other banks had already signed up to the initiative, which represents the first time banks have collaborated on how the technology that underpins bitcoin - a controversial, web-based "cryptocurrency" - can be used in finance.

The other banks announced on Tuesday were Citi, Bank of America, Morgan Stanley, Commerzbank , Societe Generale, SEB, BNY Mellon , Mitsubishi UFJ Financial Group, National Australia Bank, Royal Bank of Canada and Toronto-Dominion Bank, taking the total to 22 banks.

The consortium is being led by David Rutter, who was formerly CEO of electronic trading at ICAP Electronic Trading, one of the world's largest interdealer brokers.

The blockchain works as a huge, decentralised ledger of every bitcoin transaction ever made, which is verified and shared by a global network of computers and therefore is virtually tamper-proof. The Bank of England has a team dedicated to it and calls it a "key technological innovation".

R3's Chief Technology Officer Richard Brown, who joined the company last month from IBM, told Reuters the technology could bring banks significant savings by making their systems more efficient and transparent, with less risk of error.

"Over decades banks and other firms have built systems for themselves ... and then a collection of processes has emerged between the banks ... to make sure these systems are kept synchronised and are reconciled with each other," he said.

"With shared or distributed ledgers perhaps we can imagine a world where participants share this infrastructure, so rather than everyone running their own systems that have to be reconciled, we can have ... an open platform that multiple firms can connect to."   Continued...