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R3 a New York-based consortium of global financial institutions collaborating to develop a platform and commercial applications for Distributed Ledger Technology (DLT) has completed the first two of three tranches in its Series A fundraising round, securing $107 million. A statement from R3 characterizes the amount as the largest distributed ledger technology investment to date.
The first two tranches of the Series A round were made available only to R3 members, which include some of the most important financial institutions in the world, including ING, Sumitomo, Bank of America Merrill Lynch, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, HSBC, Ping An, the Royal Bank of Scotland, U.S. Bank and Societe Generale. The third and final tranche, which opens later this year, will be accessible to R3 members and non-R3 institutional investors.
Insurance May See Greatest Benefit
Among financial institutions, insurance carriers may see the greatest benefit from DLT and R3’s Corda DLT platform specifically, opines Carlos Arena, Director, Business Development, R3. “The lack of trading markets or standard networks make DLT concepts like trust and consensus crucial in insurance applications,” Arena comments. “We see DLT permeating life, nonlife, and reinsurance markets, both enhancing current functionality, and enabling new capabilities like dynamic risk management. But the works needs to begin now, and R3 is here to help.”
R3 reports that it will use the new funds to accelerate technology development and expand strategic partnerships for product deployment. The company’s efforts will be focused on Corda, R3’s DLT platform for regulated financial institutions, and its infrastructure network, which will support what the consortium characterizes as a vast range of partner-built financial applications that interoperate seamlessly with each other, existing systems and networks.
Since the launch of its DLT initiative in September 2015, R3 has grown from a staff of eight finance and technology veterans with nine bank members to a global team of over 110 professionals serving over 80 global financial institutions and regulators on six continents. The company’s work is further supported by over 2,000 technology, financial, and legal experts drawn from its global member base. That base includes banks, clearing houses, exchanges, market infrastructure providers, asset managers, central banks, conduct regulators, trade associations, professional services firms and technology companies.
“This investment is unprecedented. Many of the world’s largest financial firms have come together not just with capital support, but with a robust commitment to work with R3 in developing industry solutions that will be the building blocks of the new financial services infrastructure,” comments David E. Rutter, CEO, R3. “We’ve got unparalleled momentum.”
“R3 has proven the collaborative model can successfully drive innovation in financial services to a degree never before seen,” Rutter continues. “In the space of less than two years, we have built a network of over 80 members, launched an open-source distributed ledger platform specifically for wholesale financial markets, conducted over 60 detailed use cases across a variety of asset classes, led the way in regulatory engagement on behalf of the broader DLT community and are ahead of schedule for initial commercial deployments this year. We are on our way to becoming a new operating system for financial services.”
Bringing Greater Efficiency to the Financial Community and its Clients
“We are pleased to continue working with R3 on the development of the Corda effort. The investment reflects our commitment to innovating and collaborating on the next generation of financial services,” comments Ather Williams, Head of Global Transaction Services at Bank of America Merrill Lynch. “We are excited about Corda’s potential to advance interoperability and common standards, which will bring greater efficiency to the financial community and ultimately benefit our clients.”