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A global banking consortium, including Barclays, Royal Bank of Scotland and HSBC in the UK, has completed cloud-based tests of five different blockchain technologies.
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Working with IT firm R3, the consortium of banks, from all over the world, tested trading between each other using blockchain and cloud technology. The pilot was to see how distributed ledgers can be used commercially in global financial markets.
Blockchain is best known as the distributed ledger technology behind bitcoin, but banks are taking it seriously.
Project head Jurgen Vroegh, global head of payments at ING, said collaboration between banks was essential. “The trials gave us a higher level of understanding of the various technology options and insight into how smart contracts can really work on a distributed ledger,” he said.
The banks connected to private distributed ledger technologies built by suppliers Chain, Eris Industries, Ethereum, IBM and Intel, with the system managed by R3. Cloud computing resources were provided by Microsoft Azure, IBM Bluemix and Amazon AWS.
The consortium evaluated the strengths and weaknesses of each technology by running trades on them. Each distributed ledger technology ran trades based on identical business logic so that the banks could accurately compare the differences in performance.
Read more about blockchain
- This year’s Sibos event – one of the biggest in the industry’s calendar – had one word more than any other reverberating throughout Singapore’s Marina Bay conference centre: blockchain.
- Royal Bank of Scotland is among the early adopters of distributed ledger technology that could shake up the banking industry.
- Financial firms will spend more than $1bn on blockchain technology projects over the next two years, according to researchers.
Since the global financial crash, the focus has been on risk and compliance technology. But now the sector is feeling a degree of economic confidence again, and new technologies such as blockchain are emerging that present both a threat and an opportunity.
Royal Bank of Scotland is looking to take a lead on blockchain. The bank told Computer Weekly at Sibos last year that it intended to pilot a service based on the technology in 2016 with a view to releasing a product – likely to be some form of payments service – later in the year.