CHAIN-FINANCE is conducting an on-going survey on the use of blockchain or distributed ledger technologies in the financial services industry. The following directory highlights the companies, organizations and projects in the “Blockchain in Finance” ecosystem, the technology they have developed or provided, and the customers or partners that they are currently working with.
ICAP
ICAP
Notes
ICAP is a broker dealer and post-trade risk service provider. Post-trade risk is the process once a trade has been entered into where the transfer of ownership of securities and the corresponding cash needs to happen. Due to the speed of trading, there is always room for the buyer and seller to have mismatched details about a trade. Blockchain has an obvious role to play to minimize reconciliation discrepancies of this nature.
As such, ICAP’s post trading division completed a proof of technology test case using blockchain technology on 26 February 2016. ICAP believes that the blockchain has the potential to significantly transform post trade operations, while complying with new market practices within the post-crisis regulatory environment.
The test of blockchain technology by ICAP’s Post Trade Risk and Information division (PTRI) leveraged the multi asset messaging and matching Harmony network by ICAP subsidiary Traiana, and blockchain infrastructure provided by Axoni, a New York-based technology firm, to create a private, peer-to-peer, distributed ledger network using smart contracts.
ICAP has invoked the term ‘Rosetta Stone’ to describe a blockchain-based system for managing securities post-trade workflow, encoded into a single business process and designed to permit individual buyers to transact with individual brokers across a significant range of possible trades. ICAP has developed an “elaborate smart contract” to handle this peer-to-peer trading across its platform.
ICAP has been using a seven member team from Traiana to test its blockchain platform. The subsidiary’s non-blockchain integrated trading volume increased 183% from 2015 to 2016 and, as of July 2016, transacts $1.5 trillion daily from around 3 million trades over its Harmony network, based on a recent press release.
Articles concerning ICAP:
Intel
IntelNotes
Intel has developed its own blockchan technology that it has dubbed “Sawtooth Lake” or IntelLedger. Intel has also released its code for Sawtooth Lake and will be following up with a formal incubation proposal at Hyperledger, the open source blockchain tech project at the Linux Foundation.
Sawtooth Lake abstracts the core concepts of consensus, isolates consensus from transaction semantics, and provides two consensus protocols, Proof of Elapses Time (PoET) and Quorum Voting (a protocol used by Ripple and Stellar).
PoET is a lottery protocol that builds on trusted execution environments (TEEs) provided by Intel’s Software Guard Extensions (SGX) to address the needs of large populations of participants. Quorum Voting is an adaptation of the Ripple and Stellar consensus protocols and serves to address the needs of applications that require immediate transaction finality.
Notes
In April 2016, John Hancock’s “Lab of Forward Thinking” (LOFT) announced a collaboration with ConsenSys and BlockApps, a ConsenSys studio startup, in the LOFT’s first Ethereum blockchain proof of concept. The LOFT will apply blockchain technologies to enhance the on-boarding of new insurance and wealth management clients in order to enhance one of the critical drivers of customer satisfaction.
John Hancock launched its first LOFT innovation lab in July 2019 in Boston’s Seaport neighborhood, also widely known as the city’s up-and-coming “Innovation District.”
John Hancock Financial is the American subsidiary of global Canadian insurance and financial services corporation Manulife Financial.
Articles concerning John Hancock:
Notes
In addition to being a member of Hyperledger and an investor in Digital Asset, JPMorgan is a member of R3’s consortium of 45 member banks, called the R3 Global Collaborative Lab, and in March 2016 took part in testing distributed ledger technologies developed by Chain, Eris Industries, Ethereum, IBM and Intel.
In February 2016, JPMorgan revealed that it had for months been testing proprietary blockchain technology to make US dollar transfers between London and Tokyo for nearly 2,200 clients.
In its New Product Development group, the bank has developed a blockchain prototype, called Juno, which it presented to the Hyperledger Technical Steering Committee in March 2016. Juno is a distributed ledger that utilizes a “Byzantine Fault Tolerant Raft With Smart Contracts” model that provide a lower latency, higher throughput than traditional blockchains.
Juno is designed to be a platform for private network applications and removes the need for proof-of-work and proof-of-stake functions typical in current blockchains. Juno accomplishes this by using a variant of the Raft consensus protocol with Byzantine Fault Tolerance (BFT), called Tangaroa, and a smart contracts language developed for it, called Hopper.
MetroGnomo
MetroGnomoNotes
Founded: January 2016
Founders: Z/Yen - Alderney Government joint venture
Technology: Based on Z/Yen’s ChainZy
Customers/Partners: Alderney
Description:
The government of Alderney, the northernmost of the Channel Islands, is experimenting with a blockchain-based online timestamping service through a joint venture with Z/Yen called MetroGnomo. The project has been live in beta since 1 January 2016.
MetroGnomo is an open-source experimental timestamping service based on Z/Yen’s ChainZy mutual distributed ledger technology. MetroGnomo’s replicated authoritative immutable ledger is designed to improve coordination, cooperation, integration and dispute resolution between firms through the provision of impartial timing information and unique universal identifiers.
MetroGnomo does not utilize a consensus system but a woven broadcasting approach. For the purposes of timestamping, this results in an “irrefutable evidence trail” where there is no requirement for mining, as in Bitcoin or Ethereum.
The government of the Alderney hopes to use MetroGnomo as a step towards becoming the leading jurisdiction in setting regulatory and user standards for distributed ledgers globally.
Articles concerning MetroGnomo:
Prof. Michael Mainelli of London’s Z/Yen Discusses MetroGnomo Blockchain JV with Alderney
Channel Island Alderney Conducts Blockchain Trial with Z/Yen’s ChainZy Tech
Open Assets Protocol
Open Assets ProtocolNotes
Founded: December 2013
Founders: Flavien Charlon
Technology: Open Assets Protocol
Customers/Partners: Chain/Nasdaq, Overstock/t0, Fujitsu/Mizuho Bank, Metaco.com
Description:
The Open Assets Protocol is a simple and powerful protocol built on top of the Bitcoin Blockchain that allows issuance and transfer of user-created assets. The Open Assets Protocol is an evolution of the concept of colored coins.
Notes
Founded: December 2014
Founders: Thomas Bertani
Technology: blockchain agnostic oracle service
Customers/Partners:
Description:
Oraclize provides a platform-agnostic oracle service that connects decentralized applications (DApp) to trusted Web APIs and datafeeds. DApps are implemented via smart contracts built on the top of blockchains like Bitcoin or Ethereum. Since DApps run in their own walled garden, they cannot fetch any external data directly and this is where data providers (or oracles) play a role.
The developer of Oraclize describes it as a “provably-honest oracle service”, meaning that it provides cryptographic proofs on the blockchain so that users can check that data forwarded to their smart contract is unaltered. Using the TLSNotary cryptographic proof, Oraclize can provide a reliable bridge between smart contracts and the Internet. Moreover, as a part of the IPFS persistence consortium, Oraclize’s proofs have a good possibility of being available even if the Oraclize system is not reachable.
The company has developed DApps based on Oraclize and Ethereum that include a Youtube smart contract for sponsoring video providers, an Estonian digi-ID onchain revocation list, and an onchain identity verification app linking an Ethereum address to an Estonian Digi-ID.
Price Waterhouse Coopers (PWC)
Price Waterhouse Coopers (PWC)Notes
PWC has been bullish on blockchain technology. They refer to blockchain as follows:
“Imagine being able to transfer value or prevent contractual disputes over the Internet — without going through a third party. Confidently. Securely. Almost instantly. This is the promise of blockchain-based technology, and the implications are so profound that its implementation could revolutionize business practices as we know them.”
Here are some of the projects/papers PWC have published or are working on:
Notes
Founded: August 2014
Founders: David Rutter
Technology: Corda & various blockchain technologies
Customers/Partners: 43 global financial institutions
Description:
R3CEV is a New York based firm that has formed a consortium of 43 major global financial institutions to develop global standards for distributed ledger technology.
In April 2016, R3 unveiled Corda - a proprietary distributed ledger platform designed from the ground up to record, manage and synchronise financial agreements between regulated financial institutions. One of R3’s member banks, Barclays, was the first to demonstrate Corda at its Accelerator event in London, in this case for smart contract applications.
In March 2016, forty members of the R3 consortium completed testing blockchain technologies from various providers in the second experiment organized by R3. They tested blockchain tech from Chain, Eris Industries, Ethereum, Intel, IBM, Tendermint and the IPFS project. The cloud systems of Amazon AWS, IBM and Microsoft Azure were utilized for the tests.
More than just base blockchains were involved in R3’s second experiment. Some applications tested included Eris’ blockchain agnostic suite of smart contracts, different blockchain clients like Eris:db and Go-Ethereum (geth), and the peer-to-peer hypermedia protocol IPFS.
The banks that took part in trialing the five blockchain technologies included Banco Santander, Bank of America, Barclays, BBVA, BMO Financial Group, BNP Paribas, BNY Mellon, CIBC, Commonwealth Bank of Australia, Citi, Commerzbank, Credit Suisse, Danske Bank, Deutsche Bank, Goldman Sachs, HSBC, ING Bank, Intesa Sanpaolo, J.P. Morgan, Macquarie Bank, Mitsubishi UFJ Financial Group, Mizuho Financial Group, Morgan Stanley, National Australia Bank, Natixis, Nordea, Northern Trust, OP Financial Group, Royal Bank of Canada, Royal Bank of Scotland, Scotiabank, SEB, Societe Generale, State Street, TD Bank Group, UBS, UniCredit, U.S. Bank, Wells Fargo and Westpac Banking Corporation.
The second round of tests expanded on a smaller pilot completed by 11 banks in January, utilizing Ethereum’s blockchain on Microsoft Azure.
Chain-Finance articles concerning R3CEV:
R3’s Hearn Discusses Corda Platform Features, Relying on Proven Industry Protocols
SETL Launches Blockchain Powered Platform to ‘Revolutionize’ Settlements and Payments
R3’s Corda Ledger Platform Demos for First Time at Barclays Accelerator Event with Smart Contracts
BNP Paribas, SmartAngels Build Blockchain Share Register for Private Company Securities
R3 Reveals Custom Designed Distributed Ledger Platform – Corda
How Transactions Are Validated on a Distributed Ledger
Tendermint CEO on Powering Blockchains with Speed, Security, Scalability
JPMorgan Introduces “Juno” Blockchain Prototype with Lower Latency, Higher Throughput
Eris Plays Major Role in R3’s Latest Blockchain Test with 40 Global Banks
40 Major Banks Test Rival Blockchain Techs of Chain, Eris, Ethereum, IBM, Intel
Ripple
Ripple
Website: http://ripple.com
Notes
Founded: 2012
Founders: Arthur Britto, Chris Larsen, Jed McCaleb
Technology: Ripple Transaction Protocol
Customers/Partners: CBW Bank, Cross River Bank, Fidor Bank, Accenture, CGI, Earthport, IntellectEU
Description:
Ripple is a real-time gross settlement system, currency exchange and remittance network developed by startup called Ripple. Known as both the Ripple Transaction Protocol (RTXP) or Ripple protocol, the platform consists on a distributed open source Internet protocol, consensus ledger and native currency called XRP.
Ripple has raised $38.6 million in six rounds from 21 investors that included AME Cloud Ventures, Andreessen Horowitz, Blockchain Capital, Camp One Ventures, China Rock Capital, CME Group, Core Innovation Capital, Digital Currency Group Barry Silbert, FF Angel LLC, Google Ventures, IDG Capital Partners, Jesse Powell, Lightspeed Venture Partners, Pantera Capital, and Route 66 Ventures.
Ripple sits on the Federal Reserve’s Faster Payments Task Force Steering Committee and co-chairs the W3C’s Web Payments Working Group.
Notes
Founded: August 2015
Founders: Michael Folkson
Technology: Bitcoin & Ethereum
Customers/Partners:
Description:
RiskBazaar is building a platform that facilitates peer-to-peer wagers with pre-defined payouts, contingent on the occurrence of future events. The project is also developing prototype risk contracts that include wagers, conditional payments and insurance contracts.
On the platform, the insurance premium is transferred to a 2-of-3 multisignature address by the policyholder and the collateral (or reserve) is transferred by the insurer. A moderator is assigned as a third signatory who can divert the funds but cannot steal them.
In terms of peer-to-peer, RiskBazaar is working on “private investor backed” insurance contracts rather than mutual insurance arrangements. The contracts are directly P2P in the sense there is no pooling. In order to diversify, users will need to fund multiple insurance contracts.
Articles covering RiskBazaar:
Russian Blockchain Consortium
Russian Blockchain ConsortiumNotes
The formation of a Russian blockchain consortium was announced at the XXV International Financial Congress in St Petersburg.
The members of the consortium are: QIWI Group, Accenture, BINBANK, MDM Bank, Bank Otkritie, Tinkoff Bank.
These major companies in Russia’s financial sector have formed a consortium for joint exploration and implementation of blockchain technology and its derivatives. This is after the Central Bank of Russia’s officials invited banks to the broader discussion on crypto technologies development in Russia.
The blockchain consortium will represent Russia’s first collaboration platform across innovative and distributed technologies and will focus on the creation and implementation of the most advanced technological solutions in the field of financial services.
Members will engage in joint development and testing of prototypes, standardization of technology as well as opening the doors for technology for all market participants. In addition, an significant part of the consortium’s activities will be technological harmonization of Russian blockchain movement with the global one, launching an open communicative platform for the market participants and the regulator, raising the level of public knowledge and confidence in the financial services based on blockchain, according to the group.
Creating and testing the first prototypes are scheduled to begin later this year. Elaboration of legal regulation, the introduction of ultimate financing solutions to the market and global integration will follow.
QIWI is a major provider of next generation payment services in Russia and the CIS. It has an integrated proprietary network that enables payment services across physical, online and mobile channels. It has deployed over 16.1 million virtual wallets, over 167,000 kiosks and terminals, and enabled merchants to accept over RUB 66 billion cash and electronic payments monthly from over 62 million consumers using its network at least once a month. QIWI’s consumers can use cash, stored value and other electronic payment methods to order and pay for goods and services across physical or online environments interchangeably.
B&N Bank is one of Russia’s largest privately-owned banks. Founded in 1993, B&N Bank offers a wide range of corporate banking services (including lending to large corporate clients & SMEs, payment and account services, international settlements, trade finance and ECA-backed finance, payroll services and leasing), retail banking services (including deposits, credit and debit cards, overdraft facilities, car, consumer and mortgage loans) and financial markets activities.
Khanty-Mansiysk Otkritie Bank is one of Russia’s largest full-service retail banks, ranking by assets among TOP-15 financial lending institutions of the country. The Bank focuses on retail and small business clients.
Khanty-Mansiysk Otkritie Bank is double-branded: it continues as the Bank of Khanty-Mansiysk in the Khanty-Mansi Autonomous District where the brand awareness is high and operates as Otkritie Bank across the rest of Russia. In November 2014, Otkritie Group completed the reorganisation of its retail banking business as Otkritie Bank and the Novosibirsk Municipal Bank were merged into the Bank of Khanty-Mansiysk. The reorganized bank was renamed Khanty-Mansiysk Otkritie Bank.
Notes
SafeShare Global is an insurance business that specialises in creating solutions to enable the sharing economy. Their products are supported by the use of distributed ledgers.
Their product launched in March 2016 with Vrumi, a platform offering homeowners the ability to rent out affordable office space to small businesses and start-ups. Their product offers these homeowners the opportunity to opt-in to comprehensive insurance cover. Insurance for the sharing economy needs to be flexible and responsive to customer needs.
SafeShare uses a distributed ledger approach, developed by Z/Yen Group, which offers the opportunity to coordinate the provision of products between counter-parties in near real-time and to radically cut the cost of this coordination.
t0
t0Notes
Founded: August 2015
Founders: Patrick Byrne (Overstock CEO)
Technology: Open Assets protocol, blockchain / ledger agnostic platform
Customers/Partners: FNY Capital, Overstock
Description:
t0.com is a subsidiary of Overstock that is a platform that permits companies to issue equity, even shares of a public company, on a distributed ledger.
In March 2016, Overstock.com announced a plan to complete the world’s first public offering using proprietary blockchain technology. The offering will allow Overstock.com shareholders to purchase Overstock.com blockchain or traditional preferred stock. The blockchain preferred stock will trade and settle exclusively through the t0.com platform and its alternative trading system.
In December 2015, Overstock surprised the financial world when it reported that it had received SEC approval to issue its own digital securities.
Before setting up t0 in August 2015, Overstock sold its first cryptobond, worth $5 million, to FNY Managed Accounts LLC, an affiliate of First New York, as a proof of concept.
Overstock and t0 have been using the Open Assets Protocol to issue and manage digital assets.
Articles concerning t0:
Notes
Founded: Early 2014
Founders: Jae Kwon, Dustin Byington, Ethan Buchman
Technology: open source, blockchain & language agnostic stack
Customers/Partners: Eris Industries, R3, 40 global banks
Description:
Tendermint is an open source, blockchain & language agnostic socket protocol that facilitates distributed application deployment and enhances distributed ledger speed, security, and scalability.
At the heart of Tendermint is an open-source consensus algorithm. Tendermint Core runs on all the replicas and handles the consensus, P2P network, blockchain storage and interfaces with the outside world through exposed RPC functions. Each Tendermint Core speaks to a custom blockchain application,which is a standalone process, via a network socket protocol called TMSP.
The network of Tendermint Core commits transactions, and once they are committed they get pushed into the application via TMSP. At the end of a block, the Merkle root hash is returned from the application and inserted into the blockchain. In a basic application, the business logic connects to a special key-value database for storing the application state.
Articles concerning Tendermint:
Blockchain Database for World Computer Launched by BigchainDB
BigchainDB, Eris Industries Jointly Build Enterprise-Grade Decentralized Application Stack
Microsoft Hauls in 5 More Blockchain Partners Including Monero, Tendermint
Tendermint CEO on Powering Blockchains with Speed, Security, Scalability
Eris Plays Major Role in R3’s Latest Blockchain Test with 40 Global Banks
Eris Industries Becomes First Blockchain Platform on Amazon Web Services
Z/Yen
Z/Yen
Website: http://www.zyen.com/
Notes
Z/Yen Group is a commercial think tank promoting societal advance through better finance and technology. Z/Yen applies its risk/reward methodology in research on markets, best execution, liquidity, strategic planning or performance evaluation.
Z/Yen’s mutual distributed ledger (MDL) software suite, ChainZy, provides the potential basic architecture for variety of use cases.
Current Projects:
- MetroGnomo – an open-source experimental timestamping service based on Z/Yen’s ChainZy mutual distributed ledger technology. MetroGnomo’s replicated authoritative immutable ledger improves coordination, cooperation, integration and dispute resolution between firms through the provision of impartial timing information and unique universal identifiers.
- IntereXchainZ - building on the InterChainZ project, IntereXchainZ extends mutual distributed ledgers to build a functioning marketplace.
- The Impact and Potential of Blockchain on the Securities Transaction Lifecycle - The SWIFT Institute has commissioned Professor Michael Mainelli & Professor Alistair Milne, Loughborough University School of Business and Economics, to examine the impact and potential of blockchains and mutual distributed ledgers on the lifecycle of securities transactions. The research paper was released on 9 May 2016, and Mainelli and Milne determined from many interviews and focus groups involving banks, corporations and institutions from the financial services industry that only a permissioned ledger technology would be suitable for securities transactions settlement.
Past Projects:
- InterChainZ - a research consortium collaborated between July and October 2015 to look into potential uses for distributed ledgers in a number of financial services.
- Chain of A Lifetime: How Blockchain Technology Might Transform Personal Insurance - a research project carried out between August and December 2014 which explored how blockchain technology might transform personal insurance and in particular interactions among individuals and insurance companies over time.
Articles concerning Z/Yen:
PwC, Z/Yen Partner on Blockchain for Wholesale Insurance
SWIFT Research Paper Concludes Permissioned Ledger Only Blockchain for Securities Settlement
Why Insurance Needs Distributed Ledgers
Prof. Michael Mainelli of London’s Z/Yen Discusses MetroGnomo Blockchain JV with Alderney
Channel Island Alderney Conducts Blockchain Trial with Z/Yen’s ChainZy Tech
