R3 and four of its member banks have collaborated to build a solution for issuing Euro Commercial Paper (ECP) on a distributed ledger technology platform.
The prototype runs on R3’s Corda platform, and was built with participation from ABN Amro, Commerzbank, ING and KBC.
It provides an operating model for issuance and sales of ECP in a trading marketplace and, according to R3, has demonstrated the ability to reduce costs of market intermediaries.
It can also reduce operational risk, improve efficiency, and improve transparency of transactions for regulators, the group said.
Work will now continue to move the project from experimentation to production, with input from software vendors, leaders in the short-term debt instrument world and the regulatory community.
CEO of R3 David Rutter, said: “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.”
Roman Schmidt, divisional board member for advisory and primary markets at Commerzbank, added: “The ECP proof of concept is a material building block for the way new issuance can be created and distributed using distributed ledger technology.”
“This milestone has proven that, together with our ecosystem partners, we can shape the future within capital markets.”
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