R3 plans a DLT-based instant international payments platform

Enterprise software firm, R3, claims to have put forward a solution that utilizes distributed ledger technology (DLT) to introduce a faster, quicker, and cheaper way of facilitating international payments. In collaboration with the company’s 22 member banks, the product is developed on top of R3’s Corda platform, which enables direct, secure transactions via smart contracts. The company hopes to release the prototype of this cross-border payment solution by the end of 2017.

Current international payments systems usually take days for the completion of one cross-border payment, while increasing fraud risks and slowing down trade. According to R3 CEO, David Rutter, their product will improve world trade efficiency and will serve as an alternative to the current slow and costly system. This will be done by creating digitized versions of fiat currencies on a decentralized ledger that is easily exchangeable and transferable between various parties. The company also claims that the platform will enable any digital currency developed in the future to be transacted via the blockchain.

He said, "international payments systems have struggled to keep pace with the explosion of global trade and the globalization of the world’s markets. This marks a significant milestone for distributed ledger technology as we work alongside our bank members to harness its unique attributes to build the world’s first true international payments system." Banks involved in the new platform include Barclays, HSBC, CIBC, Intesa, Shinhan Bank, and BBVA.

French Bank, Natixis, is also involved in the latest R3 DLT solution. Frederic Dalibard, head of Digital for Corporate & Investment Banking at Natixis, called the proposal very promising, saying that it is built on the right approach and sets the project on a relevant path. Rutter further commented, "this solution will be a game-changer for any bank or company whose business relies on making or receiving cross-border payments, and is a key part of R3's wider strategy to leverage distributed ledger technology for faster and more efficient execution of all types of financial transaction."

Only a month ago, R3 also released version 1.0 of Corda. This blockchain-based platform is an outcome of company’s two years of intense research and hard work that, as claimed by Rutter, will  lead to the first true international payment system in the world. R3 has also been releasing other projects built on the same technology. On Monday, it announced a trade finance-focused partnership involving U.K.-based Bolero, aimed at creating an electronic bill of lading service.