R3, a financial innovation firm leading a blockchain consortium with over 50 of the world’s largest financial institutions, has announced that it will collaborate with a diverse working group of its consortium members, standards bodies, law firms, academic institutions, exchanges and market infrastructure providers to explore the development of repositories of “smart contract templates” for banks to download and use on blockchain-inspired platforms, such as R3’s Corda.
According to the official announcement, the group includes Barclays, the International Swaps and Derivatives Association (ISDA), Norton Rose Fulbright and University College London (UCL). The group will begin exploring the development of master templates to enable banks to trade and manage securities on distributed and shared ledgers.
The announcement follows the R3 Smart Contract Templates Summit in London and New York held last month. At the summit, the group discussed potential roadmaps for development and also focused on understanding the challenges of connecting existing real-world legal contracts, for products such as interest rate swaps, to smart contracts – enabling the simplification of legal documentation and mutualisation of costs for banks.
“We were delighted to participate in the recent R3 Smart Contract Templates Summit and it was inspiring to hear the views from industry, standards bodies, law firms and academia on how these emerging technologies could progress. We look forward to ongoing collaboration and the second summit in the autumn”, Dr. Lee Braine, Investment Bank CTO Office at Barclays, said in a statement.
At present, each bank stores its own instance of contracts, which can give rise to discrepancies and reconciliation challenges. Smart contracts operating on distributed and shared ledgers address this problem by enabling each party to view the same set of legal documents.
In the long-term, the group intends to work with the legal community and academics to explore how to take smart contracts to a point where they can be admissible in court and used for entry into dispute resolution. An update will be given at the second summit later this year.
“Earlier this year, we collaborated with Barclays to demonstrate how Smart Contract Templates and R3’s Corda platform could work together to provide a workable and understandable bridge between the worlds of law and technology - and were delighted by the interest this created in the broader community and the interest in our Smart Contract Templates summit”, Richard Brown, Chief Technology Officer at R3, said. “The quality of the presentations and debate at the Smart Contract Templates summit exceeded our best expectations and we are looking forward to collaborating on the further development of this innovative approach.”
