This has been a busy week for R3’s Corda distributed database, which has made three new integration announcements, each focusing on different industries or use cases.
Corda is a distributed ledger designed primarily for use by the financial services industry, although it caters to an array of other potential use cases. Corda was developed and is led by a consortium headed by R3, an American company. R3 stresses that, although it considers Corda a distributed ledger, the company does not consider Corda to be a blockchain. R3 draws the distinction in order to emphasize that Corda is designed to do much more than trade cryptocurrency, as well as to underline the data access and privacy controls built into it.
IPC Connexus Integration
The first big news item related to Corda this week was an announcement from IPC, which provides communications services for the finance industry, that it has partnered with R3 to make so-called CorDapps available from IPC’s Connexus Cloud. CorDapps are applications that run on the Corda distributed ledger, and Connexus is a cloud-based network that financial services companies can use to run business applications.
The integration should therefore make it easier for financial services companies to deploy Corda-powered apps.
Speaking of CorDapps, R3 announced an important new one this week called Corda Settler. According to a press release, Settler is “an open source CorDapp that allows payment obligations arising on the Corda Network to be settled via any parallel rail supporting cryptocurrencies or other crypto assets, and any traditional rail capable of providing cryptographic proof of settlement.”
In other words, Settler makes it possible to record payment transactions on the Corda distributed ledger, no matter which type of currencies are involved in those transactions, so long as the transaction takes place in such a way that it can be cryptographically proven.
For now, Settler supports only Ripple (XRP) transactions. That’s significant because it brings R3 and Ripple, both of which cater to the financial services industry, closer together.
What will be really interesting, however, is if R3 finds a way to record fiat currency transactions on Corda using Settler, thereby bridging the crypto-fiat divide. The Settler announcement implicitly suggests that that’s the goal, but R3 hasn’t made any firm announcements to that end.
Commercial Paper Transaction Pilot on Corda
Last but not least, R3 announced this week that it partnered with Commerzbank, ING, Natixis and Rabobank to manage a commercial paper transaction using Corda, per Banking Technology Magazine. A commercial paper is a type of financial security that companies issue in order to collect funds required to pay a short-term debt. Commercial papers essentially allow companies to obtain unsecured, short-term loans with repayment periods of less than a year.
R3 and its partners say that Corda can bring more transparency and reliability to the process of issuing commercial paper by providing greater visibility to all interested parties.
What It All Means
Taken together, these three developments bring R3 closer to achieving its goal of making Corda a widely used real-world solution for the financial services industry.
To be sure, R3’s progress on this front remains incremental and tentative. The commercial paper pilot test is only a proof of concept, and the usefulness of Settler will remain limited until it supports more types of payment options.
Nonetheless, the availability of CorDapps on IPC’s Connexus Cloud makes Corda-based solutions readily available to financial companies, and even with just Ripple support, Settler offers real value for the finance industry.