4 Banks Complete €100K Commercial Paper Transaction on R3’s Corda

Four European banks – Commerzbank, ING, Natixis and Rabobank – have settled a live transaction for a short-term debt instrument on the Corda platform developed by blockchain consortium startup R3.

According to a report from FinTech Futures on Thursday, the transaction involved an issuance of a one-day maturity euro commercial paper (ECP) worth €100,000 (or $1,13,432) at a notional value.

Natixis reportedly acted as the issuer of the instrument, Rabobank as the investor and ING as both the dealer and escrow agent. Commerzbank provided tech support and regulatory guidance.

The blockchain solution is aimed at reducing operational costs and risks for banks, as well as speeding up settlement of such transactions for their clients.

“This live trade lays the foundation for dealing ECP more efficiently and cost effectively. It also marks the start of building an improved DLT platform that enables direct settlement and reduces operational risk and costs at the same time,” Marnix Bruning, ING head of money market and central bank sales, said in the article.

As far back as 2016, R3 was working to trial commercial paper trading over blockchain systems. In one trial at the time, it worked with as many as 40 banks on a trial that used smart contracts to model commercial paper transactions.

As similar project was announced in June 2017, when it built a prototype on Corda with ABN Amro, Commerzbank, ING and KBC as the participating banks at the time.

Just yesterday, R3 also launched the Corda Settler, an application aimed to facilitate global cryptocurrency payments within enterprise blockchains.

R3 image via Shutterstock