Financial innovation firm R3, along with four member banks of its blockchain consortium, has developed a prototype solution for the issuance of Euro Commercial Paper (ECP) on R3’s Corda platform.

Corda is a financial grade distributed ledger that records, executes and manages institutions' financial agreements in perfect synchrony with their peers. ABN Amro, Commerzbank, ING, and KBC collaborated with R3 to develop an operating model for an ECP issuance and trading marketplace on the distributed ledger platform.

“Collaboration in pursuit of overcoming a shared industry challenge is the ethos that R3 was built on. As we continue to develop Corda the learnings from these proof of concepts allow us to ensure the platform can be applied to a vast array of different scenarios, processes and asset classes. This is another milestone in Corda’s journey to becoming the new operating system for financial markets”, David E. Rutter, CEO of R3, said.

According to the official release, issuing and selling ECP on a distributed ledger was more beneficial as compared to existing system and processes. The project demonstrated

• Reduced costs of market intermediaries
• Reduced operational risk and inefficiency via a shared consensus view of ECP transactions on a distributed ledger
• Enhanced transparency of the ECP market for regulators
• Comprehensive solution for issuance and settlement of a security using DLT

“The proof of concept for design and implementation was executed in a pragmatic way, considering current infrastructure components, operational processes and regulations. Distributed ledger technology can extend existing applications and provide new services for the commercial paper market,” Anton Semenov, Principal DLT Business Analyst at Commerzbank, said.

The four member banks will continue working with R3 to move from experiment to possible production. This will involve engaging with leading software vendors, thought leaders in the short term debt instrument ecosystem, as well as the regulatory community to showcase the prototype and receive feedback for a possible production-ready platform.

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