Head of Research Says R3 Open Source Blockchain Will Start Operating Within A Year

Head of Research Says R3 Open Source Blockchain Will Start Operating Within A Year

By Onose Enaholo - min read
Updated 26 January 2023

Tim Swanson, the head of research of R3 CEV has unveiled that the firm’s development team in London is currently developing an open-sourced, generic blockchain, which he said is expected to start operating within a year.

Speaking to the Sydney Morning Herald, Swanson said that member banks of R3, the fintech firm based New York leading the blockchain consortium, were interested in testing the blockchain for use cases that include trade financing, processing syndicated loans, the settlement and clearing of OTC derivatives, and marketplace lending, qualifying the generic shared ledger as “a big umbrella.”

“Many banks feel they can reduce, or eliminate altogether, various costs, by adopting some sort of common shared ledger and let that proliferate through the industry,” Swanson told the media outlet.

R3 has still not yet decided whether participation will be limited to member banks, which include no less than 30 of the world’s largest banks, including BNP Paribas, Deutsche Bank, JP Morgan, Barclays and the Royal Bank of Scotland. He further said that the company will soon decide whether it will need to seek assistance from external partners.

However, Swanson further noted that the system will still need to “pass the smell test of regulators.”

“If neither of [financial institutions or regulators] are OK with it, it won’t be used,” he said. “The best way is to start from scratch and build in [regulators’] specific needs.”

“If we do our job right, what this tech can do is allow regulators to have a window into real-time data, which they can read and react to and create policy towards. If regulators have a window into what is going on, they can get a better idea of preventing systemic risks.”

Using blockchain technology to help monitor global financial systems for systemic risk is another application that R3 has been exploring. Charley Cooper, the firm’s managing director told Bloomberg BNA that the company has discussed with regulators on the matter, noting that there has been “a significant appetite for some sort of ledger structure that would allow regulators to have a view into the world of finance.”

“It’s still early days,” Cooper said. “We haven’t designed exactly what that might look like, but it’s definitely something that’s factored into our thinking and it’s something that is driving a number of different regulatory conversations we’ve been having globally.”

Swanson further noted that most regulators he had interacted with are “cautiously optimistic,” and want “to take a rightfully conservative approach to make sure things are delivered.”

The R3 blockchain was unveiled shortly after one of Australia’s ‘Big Four’ banks, namely the Commonwealth Bank of Australia (CBA), announced it has built a working blockchain.

This week, CBA and the Coalition of Automated Legal Applications (COALA), an international collaborative research and development initiative focused on blockchain technologies, will be hosting the Sydney Blockchain Workshops, an event that aims to bring together regulators, policy makers and technologists to better understand the opportunities and challenges of blockchain tech.