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Accenture Partners with R3 and SAP to Improve Settlement Systems by Using Blockchain

Consultancy firm Accenture has partnered with blockchain technology firm R3, and software giant SAP to produce a prototype that uses distributed ledger technology to allow real-time gross settlements.

John Velissarios, managing director and global blockchain technology lead at Accenture, mentioned that the need for the platform stems from the current “highly complex and fragmented” payment settlement infrastructure. He believes that with real-time gross settlement (RTGS) systems, blockchain would be able to allow central banks to be more efficient.

RTGS systems allow electronic fund transfers between banks to happen in real-time and on a one-to-one basis, enabling immediate clearing for high-value transactions usually handled by central banks.

The prototype utilizes the SAP Payment Engine application, which allows for payment initiation, processing, clearing, and settlement while integrating with the R3 Corda platform to enable collaboration with the RTGS systems. With Accenture’s expertise in central bank clearing and settlement as well as blockchain experience, the prototype will allow peer-to-peer payments between banks.

Velissarios said:

The RTGS prototype, designed in collaboration with SAP and R3, demonstrates the next stage of efficiency in payment systems and ultimately, paves the way to linking tokenized-assets, like equities, to create an increasingly integrated and seamless financial services ecosystem.”

Stablecoins will be used in the prototype, as they are less volatile than regular cryptocurrencies. The companies are aiming to work alongside the traditional financial system rather than against it, which has led to many controversies Facebook’s Libra has been dealing with.

Cathy Minter, Chief Revenue Officer at R3, stated that there is a need for interoperability between the traditional financial services industry and token-based systems.

She added: “Corda was designed to execute transactions seamlessly from the outset, with the highest levels of certainty and security. Through our Accenture and SAP, R3 is collaborating with two of the tech industry’s major players to provide a real-time gross settlement token-based exchange. The end result is nearly instantaneous settlements, which will reduce friction throughout the transaction chain.”

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R3 – Revolutionizing Trade Finance with Blockchain

R3 leads the largest blockchain ecosystem in the world, creating initiatives using distributed ledger technology. Carl Wegner, the Managing Director and Head of Asia at R3, elaborates on the consortium’s reach with its broad ecosystem, on initiatives that are built on Corda, including, Project Voltron, Project Inthanon, Project LionRock, and Project Ubin in Asia.  

Project Voltron: Streamlining Letters of Credit 

Voltron is a blockchain-based trade finance platform, initiated by the collaboration within the R3 consortium and eight banks along with Bain & Company and CryptoBLK. As the process of issuing letters of credit (LCs) is a very manual process, Voltron explored blockchain technology to bring significant efficiencies to the industry by streamlining the process of the issuance.   

Wegner announced that Project Voltron would soon be incorporated as a new company by the end of the year in Singapore. “We will be rebranding the name because it was just the project’s name. I have been very lucky to be chosen to be the CEO, and I’m looking forward to starting this new company very soon.”  

Project Voltron started in May 2018, “the 18-month project has now not been concluded, but the banks have decided that they want to make it a real company, not just an experiment,” explained Wegner. “We’ll be setting up a new company that has been invested in by the banks and R3. We’re looking forward to launching the beta network later this month.”  

Banking giant HSBC announced that it has successfully carried out the first yuan-denominated LC using Voltron in September of this year. “Other banks, including Standard Chartered, BNP Paribas, China Trust, Bangkok Bank, RBS, have all done different pilots, and they are working together to understand different components of LCs and the challenges. That has helped us to develop the product as well,” Wegner added. 

Marco Polo Network: Powering Trade Finance 

The Marco Polo Network, jointly built by R3 and TradeIX, is the largest and fastest-growing trade finance network globally. Gathering participants in the global trade ecosystem, the network provides an open enterprise software platform and working capital for banks and large corporations.   

“Marco Polo Network is probably the most advanced in terms of post-trade-financing, they’re working with over 30 banks now to build this system which R3 supports because they’re built on Corda,” said Wegner. “As one of the solutions built on Corda, we will continue to work with them quite closely with our ecosystem of banks as well. As they grow, we grow, and we will continue to support them.” 

R3’s Community Continues to Build 

At the base layer, Corda is able to differentiate itself from other systems as it is a community. “A business network built on Corda can interoperate with another business network, which is unique among enterprise blockchain systems,” explained Wegner. He further added that each party does not have to build the full solution, as they can quickly find another party or company that is building the solution and collaborate. “You don’t have to build APIs between them so they can collaborate even quicker. It becomes a quicker commercial discussion rather than a tactical discussion on how they can work together. That’s the advantage of Corda over other systems and why the community continues to build.”  

Wegner concluded, “The interesting thing is seeing how ledgers allow different companies to talk together, with a set of rules; it’s going to change business.” 

Recap on 2019 Blockchain Use Cases: Who Got Off the Ground?

R3 Corda Closes 2019 with a Bang

Corda is an open-source blockchain platform that enables businesses to transact directly and in strict privacy using smart contracts, reducing transaction and record-keeping costs and streamlining business operations.

In a world of permissionless blockchain platforms, in which all data is shared with all parties, Corda’s strict privacy model allows businesses to transact securely and seamlessly.

According to Yahoo Finance, R3 has closed what it’s calling the largest open-account trade finance trial ever conducted on its Corda platform.

This trial included more than 70 organizations from more than 25 countries. Upwards of 340 participants from those organizations were involved and came out from sectors like financial services, information technology, telecommunications, logistics, the maritime industry, real estate, hospitality, and the automotive industry.

JPM Coin

Banks and financial institutions have gotten further involved in the blockchain space and JP Morgan became the first US bank to create and successfully test a digital coin representing a fiat currency. The JPM coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional clients.

JPM Coin’s primary purpose is similar to a “stablecoin” but used on a business-to-business (B2B) basis rather than a peer-to-peer basis. Corporations deposit fiat currency at JP Morgan in exchange for JPM tokens, which can then be exchanged within a permissioned blockchain. At any time, the tokens can be redeemed for cash via JP Morgan should a client wish to transact outside of the blockchain. To some extent, this is a massively positive step for crypto-adoption. Bitcoin and the cryptocurrencies that have followed in its wake have already revolutionized how we look at money today, and they are continuing to grow in popularity, usage, and value. There is no denying the ideology behind the tech is inspiring, and the surge in adoption is indicative that the idea is catching on.

Facebook’s Lost Libra

Facebook’s Libra project has dominated blockchain headlines this year ever since the social media giant announced the cryptocurrency’s development. The project has faced intense scrutiny for US and European Lawmakers ever since Libra was unveiled to be a stablecoin backed by a select number of national currencies, leading to CEO Mark Zuckerberg being summoned to Capitol Hill for questioning in October.

Libra, is designed as a stablecoin and will be fully backed by a reserve of real assets dubbed the “Libra Reserve”. The trading of Libra is supported by a competitive network of exchanges such as Coinbase.It will be backed by a basket of low-volatility assets, such as short term government securities and bank deposits in currencies from reputable central banks. This is also the major difference between Libra and existing cryptocurrencies which most of them do not have underlying assets. Libra’s white paper claims that it will use “a new decentralized blockchain, a low volatility cryptocurrency, and a smart contract platform” to empower about 1.7 billion unbanked people. This will be achieved through the use of Facebook’s WhatsApp messenger, and Calibra, which is a digital wallet designed for Libra users.

Congress has asked Zuckerberg to pause the further development of Libra to which he has assured his compliance. The scrutiny has led to many of Libra’s original major back to leave the project including Visa, eBay, MasterCard, and PayPal. Things do not look likely to improve any time soon as just last month the Governor of the Federal Reserve, Lael Brainard warned a European Central Bank (ECB) forum in Germany, that the risks posed by the potential mainstream adoption of Facebook’s proposed Libra, are too immense.

Telegrams Violated Exemption

Telegram’s TON has also had an interesting 2019. After coming under fire from the United States Securities Commission (SEC), Telegram has allegedly informed its investors that it will postpone launching its Telegram Open Network (TON).

According to Cointelegraph, on Oct. 16th Telegram sent a message to its investors saying it wants to push the launch from the previously set late October 2019 to April 30, 2020.

The change in the plan came following the SEC’s press release that declared that Telegram’s $1.7 billion dollar token offering was illegal and that emergency action and a restraining order had been filed against Telegram. The complaint further stated that the SEC considers tokens to be securities and the Securities Act of 1933 requires all securities to be registered with the SEC, which Telegram had failed to do.

The majority of investors of the Telegram Open Network (TON) in the $1.7 billion Gram token sale have voted against the return of their funds and agreed to postpone the launch of the blockchain network. Telegram sent a message to its investors saying it wants to push the launch from the previously set late October 2019 to April 30, 2020.

On Oct. 23, Forbes Russia reported the news, quoting “two sources close to the Telegram team.” The report stated that by majority vote, investors refused to demand a return on the money invested in the project and agreed to wait until the blockchain platform is launched in April 2020.

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Hong Kong’s Central Bank and Bank of Thailand Announce Results of Blockchain-Based CBDC Study

The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand published the results in a research report of the Project Inthanon-LionRock, by the two central banks on the application of distributed ledger technology and central bank digital currencies (CBDCs) on cross-border payments. In May 2019, the two authorities signed a Memorandum of Understanding (MoU) on fintech collaboration, as Thailand is one of Hong Kong’s top 10 principal trading partners.

Project LionRock, native to Hong Kong’s central bank, started in 2017, along with three note-issuing banks, R3 consortium and Hong Kong Interbank Clearing Limited, and proof-of-concept (PoC) was developed. Currently, the banks that are involved in the project are the Hong Kong Shanghai Banking Corporation Limited, and ZA Bank, a virtual bank that is licensed by the HKMA, and formerly known as ZhongAn.

Project Inthanon started in 2018 and has arrived at its third phase. The two projects are exploring how distributed ledger technology and blockchain could be used for cross-border funds transfers. The two authorities have agreed to continue to further research in relevant areas, including the involvement of other banks and relevant parties in facilitating cross-border fund transfer trials. In the third quarter of 2019, eight banks in Thailand joined the central bank to develop the cross-border funds PoC.

Not made for retail

One of the key findings from the study concluded that due to the highly efficient and trusted retail and wholesale payment infrastructures in Hong Kong, there is not an urgent need for a CBDC at both the retail and wholesale levels. Although there is little value in developing a CBDC for retail payments, the study found that there has been an increase of interest in cross-border payments in funding solutions. The two authorities hope the study will help both jurisdictions in terms of trade.

Comparing to China’s CBDC

As China has been reportedly ready to launch its own CBDC, used mainly as digital cash issued by the central bank, the HKMA believes that there would not be an area for partnership, as China’s CBDC is primarily focused on the retail market. Although China also has other methods of payment, including Alipay and WeChat Pay, Pou explained that Hong Kong still does not have a need for a retail CBDC.

Solving the current pain points of the existing cross-border funds model

The study also aimed to solve the current pain points of the existing cross-border funds transfer model, such as the inefficiencies in settlement time, high fees involved in currency exchange, and the involvement of extensive intermediaries. The development of CBDC in both jurisdictions will allow for a seamless experience with cross-border remittances, with the access of competitive foreign exchange pricing, liquidity management, and saving mechanisms, and improving the transparency of transactions to fulfill regulatory requirements.

Mathee Supapongse, the Deputy Governor of the Bank of Thailand said, “Building on pain points and business cases, the novel cross-border model is designed and developed as a PoC.”

By utilizing blockchain, liquidity management and saving mechanisms could be automated, smoothening the payment process, including transaction queuing and conversion. Cross-border funds transfers could be completed in real-time, with fewer intermediaries involved and settlement layers. So far, only a Thai Baht to Hong Kong Dollar corridor has been tested with the 10 participating banks from Thailand and Hong Kong, the model is designed to be scalable and could be used with other jurisdictions as well.

Edmond Lau, the Senior Executive Director of the HKMA added, “Our joint research project with the Bank of Thailand marks an important first step to solve the pain points of low efficiency and high costs in traditional cross-border payments. With the use of blockchain technology, the innovative and unique solution not only addresses different technical issues in practical applications, but also offers good references to the central banking community on the use of CBDC.”

Practical solution and assessing hurdles

“What makes our study different is that we actually offer practical solutions to address the most well-known pain points in cross-border remittances […], not just theoretical or technological; so we hope we can offer some useful references to the central banking community,” said Colin Pou, the Executive Director of Financial Infrastructure of the HKMA.

According to Pou, the corridor network is meant to be a “trusted platform” for remittances, a platform that users can count on since it was created by central banks.

The next areas of focus of the study was said to be more extensive research on the technical, legal, and governance requirements of the CBDC. However, the HKMA representatives did not give a specific time for the potential launch, as other hurdles need to be assessed before setting a time for the launch.

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R3's Marco Polo Network Welcomes First Indian Corporate as Asia Serves as a Key Area of Growth

Launched in 2017, the Marco Polo Network aims to provide an “open enterprise platform for trade and working capital finance to banks” and corporates and a blockchain-powered solution for a better security system of the exchange of data and assets between participants.

The Marco Polo Network announced on Thursday that India’s leading provider of digital transformation, Tech Mahindra became the first corporate in India to join the R3’s open-source blockchain-based Marco Polo Network for facilitating cross-border transactions.

With this new partnership, Tech Mahindra carried out several digitized trade finance transactions, facilitated by its partnering bank DBS Bank, utilizing Marco Polo’s Receivables Discounting tool. This tool is a solution that enables effective management of working capital, enhances liquidity and reduces any risks associated with credit.

Rob Barnes, CEO of the Marco Polo Network and TradeIX, the company behind the Marco Polo Network highlighted that the decision behind bringing an Indian company onboard was due to the fact that “Asia serves as a key area of growth for the Marco Polo Network.”

“We are in extremely difficult and challenging times now, with facilitating trade and minimizing supply chain disruptions becoming even more important now than ever,” stated Barnes. “This is a great achievement with two leading institutions with more collaborations planned in the near future.”

Blockchain development in India’s Telangana

Tech Mahindra has been exploring with blockchain technology as it also has its own specialized blockchain unit. In partnership with the government of one of India’s states, Tech Mahindra launched a blockchain accelerator last month. The blockchain accelerator, T-Block comprises a four-month program presented by the Telangana government in collaboration with IBC Media, Microsoft, and Tech Mahindra. It seeks to bridge the gap endured by Indian startups as they only reap 0.2% from blockchain investments.

Upon joining the accelerator, startups will be instructed through a one-week boot camp followed by a month-long training event spearheaded by gurus in the blockchain space.

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DBS Bank Joins R3-Backed Blockchain Trade Finance Network Contour Built on Corda

Singapore’s biggest bank, DBS Bank joined R3-backed Contour Network known for digitalizing global trade processes.

Previously known as Project Voltron, Contour is a blockchain-based trade finance platform, built over R3’s Corda blockchain and was founded by R3 and major global institutions, including HSBC, ING, Standard Chartered, Citi Ventures, BNP Paribas, and Bangkok Bank, Bain & Company, and CryptoBLK. DBS Bank became the first Singaporean bank to join the network.

Project Voltron in May 2018, and the project was concluded as the founding banks have decided that they want to make the project into a real company, not just as an experiment, explained Carl Wegner, CEO of Contour.

Banking giant HSBC previously announced its success with carrying out the first yuan-denominated letter of credit (LC) using the platform in September last year. “Other banks, including Standard Chartered, BNP Paribas, China Trust, Bangkok Bank, RBS, have all done different pilots, and they are working together to understand different components of LCs and the challenges,” Wegner added.

DBS will be utilizing Contour’s digital solutions to provide fully digital end-to-end LC settlement processes, including the transfer of electronic trade and title documents to its customers. The coronavirus pandemic has led a demand for “contact-free” banking solutions which also makes digitalizing rade processes more popular and relevant. This new solution would allow an increase of efficiency in settlement time, reduction of paperwork, and the simplification of trade processes.

John Laurens, Group Head of Global Transaction Services at DBS Bank said, “We’ve been employing technology and digital solutions to innovatively unlock opportunities for our corporate customers across sectors and of all scale. This is more than simply digitizing a historically paper-based service; it’s about transforming the way industries work by providing greater transparency, security, and speed to build sustainable trade ecosystems that are able to weather the peaks and troughs of economic cycles and are resilient in times of crisis.”

In 2019, despite facing an increasingly challenging and uncertain environment, especially the second half of last year, DBS achieved a record performance and successfully launched DBS’ First Fully Virtual Wealth Management Account Opening Solution. Ajay Mathur, the Head of Consumer Banking and Wealth Management at DBS exclusively spoke with Blockchain.News to elaborate on a two-year process to taking the leap into FinTech and roll out virtual banking and wealth management services.

The integration of FinTech into banking services allows the customers at DBS to have full access to our branches with a “phygital” experience providing customers with a more tailored experience as well as a virtual digital banking and wealth management experience.

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Permissionless Blockchains fit the Business World's Needs

R3 CTO Richard Brown recently published an interesting article. Among other issues, the story states explicitly permissionless blockchains have probabilistic confirmation of transactions. We want to clarify several parts of this problematic statement by describing how Concordium solves some of the challenges for Permissionless Blockchains.

Transactions confirmation are not probabilistic

Richard Brown claims that permissionless blockchains inherently only have probabilistic confirmation of transactions. To discuss this statement, it is essential first to understand what it exactly means. Taking Bitcoin as an example, the general rule there is to accept a transaction as soon as it is in a block that is six blocks deep in the chain. Bitcoin is supposed to be secure as long as less than 50% of the computing power is corrupted. If we are close to this limit and an attacker controls almost 50%, that attacker can win 7 blocks in a row with probability almost (1/2)^7 = 1/128. If that happens, the attacker can create a fork of the chain to exclude the previous 6 blocks and thereby invalidate the transaction. Hence, there is some probability (almost 1% in this case) that the confirmed transaction gets unconfirmed. In fact, winning seven blocks in a row is not the only option for the attacker, and several research papers are bounding the precise probabilities in different settings, but let’s stick with the pure numbers for the purpose of this discussion.

We can now ask the question of whether this probabilistic nature applies to all permissionless blockchains. An important observation is that all systems based on cryptography are only probabilistic in some sense. For example, if digital signatures are used to sign transactions, an attacker can steal your money if they can forge a signature. Signatures should be unforgeable when a good signature scheme is used. But note that this does not mean it is impossible to forge a signature: A straightforward attack is that the attacker tries a random secret key and hopes that it matches your key. If it matches, the attacker can forge signatures easily. If your key has 256 bits, the probability that a random key equals yours is (1/2)^256. This probability is so incredibly small that people assume it never happens and thus they just say signatures are unforgeable (instead of probabilistically unforgeable). Going back to Bitcoin, one could easily modify the confirmation rule to wait for 256 blocks instead of 6 blocks. In that case, the failure probability would be smaller than the probability of guessing a random key. For that kind of system, it would thus be fair to say it has true finality.

The reason people only wait for six blocks instead of 256 is that it already takes 1 hour to wait for six blocks in Bitcoin. So they are trading security for speed. The real problem is thus not to remove the probabilistic nature, but to get finality faster.

For that purpose, Concordium has developed a finality layer that marks blocks as final much faster and, at the same time, offers a high-level of security. Led by Professor Jesper Buus Nielsen of the Concordium Blockchain Research Center Aarhus (COBRA) Concordium has created Afgjort (pronounced ow-gui-ort). This new finality layer ensures that blocks become quickly finalized with 100% certainty. Named after the Danish expression for “agreed upon”, Afgjort [DMM+19] has been proven secure, meaning that there is a mathematical proof that Afgjort achieves the aspired finality guarantees.

Afgjort is executed by a subset of the nodes (the “committee”). This committee is currently selected based on their GTU-stake to ensure that those participants with the most stake participate in the finalization. Note that the chain is permissionless and everyone may run a node and hence participate in Afgjort as long as the selection criteria are met. A block is then declared finalized when a set of finalizers with sufficiently high, total stake votes for the block in the BA protocol. Thus finalization can be executed without knowing the total number of finalizers and who they are.

Moreover, this finality layer can be added on top of any blockchain protocol that meets the basic blockchain properties similar to those of Bitcoin [GKL15]. Afgjort is also compatible with efficient Proof-of-Stake (PoS) based blockchain protocols such as Ouroboros Praos [DGKR18], adding strong finalization guarantees and improved performance to these protocols so that they can serve as a solid basis for the Concordium blockchain.

Finality as a Service (FaaS)

It is unquestionably a significant challenge to engineer a high assurance implementation of a finality layer such as Afgjort and execute it over a blockchain protocol with a wide enough user base (and a proper stake distribution) guaranteeing that less than one-third of the committee is malicious.

While Concordium’s engineering team is tackling this challenge, our researchers are already hard at work on one of the most innovative features of the Concordium blockchain: Finality as a Service (FaaS). Concordium’s FaaS will make strong finality guarantees accessible to third party decentralized applications without the need for their users (or operators) to execute Afgjort.

Concordium’s FaaS will allow third-party applications to submit data to be finalized by Afgjort running on Concordium’s blockchain. For example, a third-party blockchain protocol can submit block hashes to have its blocks finalized by Concordium’s FaaS.

Conclusion

As Richard Brown said, “the potential of blockchain to solve real problems in the enterprise, especially problems between businesses, is immense.” Limiting this potential to the permissioned version of this technology could be inefficient from a pure business point of view, and when it comes to finality, it is simply inaccurate.

Needs are various; solutions are too, and, as always, it is crucial to find the right solution to the problem at hand. We invite users in general and business owners in particular to find the right match for their requirements by exploring the permissionless landscape.

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References

[GKL15] The Bitcoin Backbone Protocol: Analysis and Applications. Juan A. Garay, Aggelos Kiayias, Nikos Leonardos. EUROCRYPT 2015.

[DGKR18] Ouroboros Praos: An Adaptively-Secure, Semi-synchronous Proof-of-Stake Blockchain. Bernardo David, Peter Gazi, Aggelos Kiayias, Alexander Russell. EUROCRYPT 2018.

[DMM+19] Afgjort: A Partially Synchronous Finality Layer for Blockchains. Thomas Dinsdale-Young, Bernardo Magri, Christian Matt, Jesper Buus Nielsen, Daniel Tschudi. https://eprint.iacr.org/2019/504

Disclaimer

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain. News. Investors should be well aware of the volatility of cryptocurrencies and conduct their own research before making investment decisions.

Image source: Concordium AG

IBM and R3 to Scale Up Hybrid Cloud with Blockchain Capabilities

Tech giant IBM has teamed up with R3, an enterprise software company, to boost hybrid cloud with blockchain capabilities so that the highest levels of data privacy, compliance, and performance can be achieved.

Building blockchain solutions for enterprises in regulated fields

Through the strategic partnership, a new open beta program will integrate R3’s blockchain platform Corda Enterprise with IBM LinuxONE, enterprise Linux servers for cloud solutions, from next month. As a result, the hybrid cloud will be enhanced both on-premises and the IBM cloud.

THe hybrid cloud is an environment of mixed computing, services, and storage. It includes a public cloud, private cloud services, and on-premises infrastructure.

Enterprises are continuously seeking blockchain solutions, which offer enhanced performance as well as advanced data privacy and security features. This has been the case, especially for those in regulated industries. Therefore, this partnership intends to bridge this gap.

As per the announcement:

“For clients with highly sensitive data and workloads such as digital identity, digital assets, central bank digital currencies, tokens, payments information, or smart contracts being spread across hybrid cloud environments, IBM LinuxONE provides a highly secured platform certified to meet the highest level of security certification commercially available.”

Confidential computing abilities

The blockchain solution is expected to offer enterprises with confidential computing capabilities, such as data encryption both in-flight and at-rest, tamper protection, and ‘Keep Your Own Key’ workload isolation.

Ross Mauri, IBM Z general manager, noted:

“In keeping with IBM’s efforts to bring choice to clients in the era of hybrid cloud, we support an open ecosystem of blockchain providers. Bringing R3 to IBM LinuxONE is another exciting example of leveraging our highly secured confidential computing capabilities to help our clients of all sizes, across any industry, protect their most sensitive data across the hybrid cloud.”

Boosting scalability

The blockchain platform is expected to enhance the hybrid cloud with efficiency, security, and scalability features. As a result, enterprises will be able to run their most sensitive workloads with flexibility and transparency.

Jason Kelley, the general manager at IBM Blockchain Services, acknowledged:

“This center of excellence is being designed to innovate and incubate client-requested ideas and use cases leveraging IBM’s deep expertise in developing and standing up commercially available production-grade blockchain networks.”

IBM is continuously making notable strides in the blockchain space. Last month, it partnered with the Thailand Blockchain Community Initiative (BCI) to extend the scope and reach of a blockchain-powered electronic letter of guarantee (eLG) platform to businesses of all sizes. Since its inception in late 2019, the platform has handled guarantee letters worth nearly $300 million.

Blockchain Industry Leaders R3 and FORMS HK join Cyberport to Launch “Block AdVenture” Program

Hong Kong’s innovation hub, Cyberport has partnered with leading global enterprise blockchain platform provider R3 and pioneer of blockchain applications FORMS HK to launch the Block AdVenture program.

The Block AdVenture program is part of Cyberport’s commitment to empowering Hong Kong start-ups through the use of cutting-edge technologies and creating innovative digital solutions that meet the market’s needs. Blockchain is one of the key technology clusters promoted by Cyberport.

According to a release shared with Blockchain.News on Oct 22, the Block AdVenture, program equips local startups with a deeper knowledge of blockchain and assistance in making better use of blockchain platforms. The program has been designed to help start-ups validate their business ideas and accelerate their product-market fit through community events, workshops, mentorship from industry leaders and access to prospects and investors.

Eric Chan, Chief Public Mission Officer of Cyberport, said:

“Blockchain applications have become prevalent across different industries, helping to make the information transfer in business activities more efficient and transparent. We can see successful examples of blockchain technology being used in finance, logistics, testing and even esports and the fashion industry.”

How does it Work?

Over the three month duration of the Block AdVenture program, representatives from R3 and FORMS HK will pass on their knowledge of blockchain applications to start-ups and provide one-on-one coaching to help participants develop proofs of concept (POCs).

Marc Liew, APAC Venture Development Lead of R3, said:

“R3’s Venture Development program will serve as a gateway to the R3 ecosystem for entrepreneurs and start-ups seeking to leverage blockchain technology to accelerate their business. As the world of enterprise rapidly evolves, businesses need strong partnership networks and support to face a ‘new normal’ – and we will do everything we can to support Hong Kong’s thriving technology sector in collaboration with our partners.”

The program is open to all start-ups and other local companies that have an interest in applying blockchain technology in their business development but only ten will be shortlisted to take part in Block AdVenture based on three criteria – impacts, innovation, and technology – in the business proposal they submit.

The Block AdVenture program will end with a demo day, and the most outstanding companies will be awarded cash prizes and investment matching opportunities as well as the Corda Enterprise Development License to help deploy their solution for production. In addition, R3 will provide all participants with an extended Corda Enterprise evaluation license, free AWS cloud credit, business use case consultancy, one-on-one industry expert mentorships, and technical consultancy.

The program is free of charge. Hong Kong startups interested in taking part can apply before November 16.

In other news, R3 has also teamed up with tech giant IBM to boos Hybrid Cloud capabilities with blockchain, for enhanced data privacy, compliance and performance.

R3 Highlights the Transformative Potential of Tokenization in Finance

The Promise and Challenges of Tokenization

Tokenization, the process of converting real-world assets into digital tokens on a blockchain, is poised to revolutionize the financial industry, according to R3. It promises benefits such as access to new markets, product innovation, and better liquidity management. However, the technology faces hurdles like regulatory compliance and the lack of industry standards.

Regulatory Hurdles

The banking industry faces challenges in dealing with tokenized deposits and public chains. Basel rules impose exposure limits on crypto assets, requiring strict adherence to compliance guidelines. Regulatory sandboxes like the EU’s DLT Pilot Regime and the UK’s FMI Sandbox offer some relief by providing a controlled environment for experimentation.

The Need for Collaboration

For tokenization to succeed, there must be close collaboration among government agencies, financial institutions, and technology providers. R3 and Adhara have launched the Hyperledger Lab, Harmonia, to facilitate open conversations around enterprise blockchain interoperability and industry standards.

Implementing the Right Protocols

The financial world is on the brink of a digital transformation, with $5 trillion in assets potentially being tokenized in the next five years. Implementing the correct tokenization solutions and frameworks, such as control location services and custody frameworks, is crucial for this transition.

A Digital Future for Finance

Tokenization is not merely a trend but a transformative force that will continue to shape the future of finance. It has the potential to democratize investment opportunities, improve cost efficiency, and enhance collateral management. However, overcoming challenges like distribution complexity and regulatory compliance is essential for its widespread adoption.

The Importance of Standardization

While tokenization offers a plethora of opportunities, the absence of standardized protocols and frameworks remains a significant barrier. Industry players like R3 are actively working to shape these standards from the inside by openly collaborating. For example, the launch of Hyperledger Lab, Harmonia, aims to enable open conversations towards building industry standards around enterprise blockchain interoperability.

Regulatory Frameworks as Catalysts

Regulatory frameworks such as the EU’s DLT Pilot Regime or the UK’s FMI Sandbox can act as catalysts for innovation. These frameworks provide the much-needed regulatory certainty and encourage experimentation, enabling market participants to implement new technologies that support the tokenization of financial and digital assets.

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