R3 Tests Blockchain for Banking Institutions

News and Analysis

New York-based blockchain startup R3CEV leading a consortium of 42 major banks and financial institutions announced it had finalized technology testing with eleven members of the group.

According to the company, the testing covered Ethereum network-based distributed ledger. However, it was Microsoft Azure that hosted the network. Previously, Microsoft Azure announced it would be supporting Ethereum’s blockchain-as-a-service. The startup states it intends to hold several tests with the group’s members.

Participating in the testing operations were BMO Financial Group, Credit Suisse, Commonwealth Bank of Australia, HSBC, Natixis, Royal Bank of Scotland, TD Bank, UBS, UniCredit, and Wells Fargo.

R3CEV CEO David Rutter said:

“The transition from vision and hypothesis to application and execution signifies the next major step towards using this technology to transform how institutions interact, report and trade with each other in financial markets. This is a very exciting development, both for R3 and our member banks, as well as the global financial services industry as a whole.”

Blockchain technology continues gaining support amidst major banking institutions. For instance, Jamie Dimon, CEO at J.P. Morgan Chase said:

“The blockchain is a technology which we’ve been studying, and yes it’s real, it can probably reduce the cost of doing business. If it proves to be cheap and secure, it would be adopted for a whole bunch of stuff.”

However, he completely dismissed bitcoin, the currency based on the technology he praises.

Entities participating in R3 tests were positive about the results thereof. Thus, Stephan Hug, the group’s chief architect for Credit Suisse, said:

“Blockchain is an emerging focus for our industry and Credit Suisse. As one of the early participants with R3 we are very happy to be part of the consortium which leads the industry’s research into the value and applicability of this technology.”

R3CEV, founded in late 2015, intends to research possible blockchain implementation in major banks and financial entities. However, several spokespersons for bitcoin community expressed their doubts about the proclaimed intentions of the startup. They suggested R3CEV’s true objective is to prevent widespread propagation of cryptocurrency.

The company found itself in the center of a media turmoil, which followed Mike Hearn’s flagrant statements about alleged failure of bitcoin. Eventually Mike Hearn left Bitcoin Core development team for R3CEV.

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