R3 and member banks of the blockchain consortium are working on a distributed ledger platform for financial services: Corda.

Richard G Brown, Chief Technology Officer, R3, made the announcement via online post. He said that the platform is specifically designed to manage ‘financial agreements’ between financial institutions.

“Corda is a distributed ledger platform designed from the ground up to record, manage and synchronise financial agreements between regulated financial institutions. It is heavily inspired by and captures the benefits of blockchain systems, without the design choices that make blockchains inappropriate for many banking scenarios”, Brown explained.

Corda, with the mantra “different solutions for different problems”, has several unique features. It shares data only among those parties that have a legitimate need to know and its design directly enables regulatory and supervisory observer nodes. It supports a variety of consensus mechanisms and transactions are validated by parties to the transaction rather than a broader pool of unrelated validators. Importantly, Corda records an explicit link between human-language legal prose documents and smart contract code and has no native cryptocurrency.

“[W]e are not building a blockchain.   Unlike other designs in this space, our starting point is individual agreements between firms (“state objects”, governed by “contract code” and associated “legal prose”).  We reject the notion that all data should be copied to all participants, even if it is encrypted”, he explained.

Brown further said that their focus is on agreements, with emphasis on the need to link to legal prose from the very beginning. Also, they have taken into the account the reality of managing financial agreements, which includes making it easy to write business logic and integrating with existing code; focus on interoperability; and support ‘choreography’ between firms as they build up their agreements.

“In the coming weeks and months, you’ll hear more about Corda, about our initial projects and about its design.  We will also be gearing up to release the core platform as open source, possibly as a contribution to other endeavours”, Brown concluded.