R3 Aims To Build The Operating System Of Finance

R3 Aims To Build The Operating System Of Finance

R3 is rolling out a new finance operating system that would be matched with top platforms such as Apple’s App Store, says R3’s CEO David Rutter.

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R3 is rolling out a new finance operating system that would be matched with top platforms such as Apple’s App Store, says R3’s CEO David Rutter.

The company’s headquarters is located in New York City and it specializes in distributed databases under the trade name R3CEV or simply R3. The company is currently spearheading a consortium that is developing a blockchain database that will be used in the financial system. This state-of-the-art technology would bring together the current banking system by one ledger leading to a revolutionary near-real time transactions. Its flagship is Corda, a platform that was built based on blockchain, allowing developers to seamlessly integrate the platform into any financial system. R3 seeks to emulate Microsoft’s Windows Operating System’s ability to run on various software with its Corda.

According to Rutter, entrepreneurs will be empowered by the Corda’s open system which allows them to build Corda Apps, release them, and integrate them into the current financial system which is in essence compliant with the regulatory system.

During a fundraiser round in May, R3 was able to raise a whopping $107 million, the largest single investment that a blockchain company has ever raised. The pitching was spearheaded by major international banks such as UK’s HSBC, Japans’s SBI Group, the French investment bank Natixis and Brazil’s Banco Bradesco. During the first two stages of the fundraiser, only consortium members were involved which comprises of more than 70 financial institutions worldwide.

Rutter stated that financial institutions especially banks have always spend tens of billions of dollars each year writing APIs between order management and trading systems during an interview with Business Insider. According to him (Rutter), third-party software have a tendency of failing to communicate effortlessly. This argument was proven right after a Santander’s report in 2015 which confirmed that blockchain technology is capable of saving in excess of $20 billion dollars per year if banks were to implement it.

Currently, R3 has partnered with 40 leading financial institutions on top of its 50 members of the consortium. Rutter added that the deployment of the blockchain is the center of interest for the financial institutions in which various themes such as Post-Trade Processing, Global Digital Identification, Trade Finance and Payment is set to be implemented.

On the other hand, Rutter says that the development of Corda would consume a major portion of the $107 million investment besides inspiring developers to begin building the platform with the help of the training materials provided by R3.

Despite the prevailing challenges such as some investors retracting their investments from R3, Rutter remains positive and is willing to push the company’s mission to the next level. Major investors like JP Morgan backed off from R3 towards the end of April, a move to invest more on Ethereum Enterprise Alliance, one of the blockchain company that it (JP Morgan) co-founded. Other investors who left R3 include Goldman Sachs, State Street, and Santander.

However, Rutter believes that those investors who left R3 for rival blockchain companies would consider coming back in the future to R3 as Codar is likely to be the standard.

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