Enterprise software firm R3, together with partners Commerzbank, ING, Natixis and Rabobank, have announced the completion of a live commercial paper transaction on the Euro Debt Solution application, built on Corda, R3’s blockchain platform. Corda records, manages and executes financial agreements in a range of industries, including financial services, healthcare, shipping and insurance.
With Natixis acting as the issuer, Rabobank acting as the investor and ING as both the dealer and escrow agent, the trade saw the successful issuance of €100,000 notional, with a one-day maturity. Commerzbank provided the pilot framework, software and distributed ledger network for the trade as well as guidance on regulatory implications.
Since the project began in 2017, participants in the initiative have established an operational structure and worked closely with external legal counsel Allen and Overy to develop a comprehensive legal framework.
The project aims to offer a streamlined capability for accessing debt whilst bringing greater transparency to the marketplace. Participants will also benefit from reduced operational costs and risk, as well as being able to deliver intraday settlement finality for their clients.
“The issuance and settlement of securities is a complex process and current models are rife with inefficiency,” says David E. Rutter, CEO, R3. “Corda addresses these challenges by enabling parties to financial agreements to record them once and collaborate to maintain accurate, shared records of these agreements. He notes that the successful live trade on the Euro Debt Solution demonstrates the clear advantages of blockchain over existing processes and marks the next step towards a production-ready solution on Corda.