Microsoft Corporation (NASDAQ:MSFT) has teamed up with the R3 blockchain consortium in order to help in speeding up of the development of distributed ledger platforms for financial services industry. The announcement was made during the inaugural Envision conference for business leaders on April 4th by the Redmond Wash software maker.
Blockchain is popularly known for the technical foundation of Bitcoin and other cryptocurrencies that have surfaced up on the internet. It is hailed as one of the most transparent and tamper resistant ways to make transfers online. The FinTech companies, such as Code & Pepper, have been eager to use the blockchain technology so they can build efficient next generation banking systems and also convenient payment and trading systems for themselves and their clients.
The consortium R3 consists of 43 financial institutions both domestic and international. Some of the member banks include, J P Morgan, Royal Bank of Scotland, Deutsche Bank, and Wells Fargo with some other well known institutes also part. The group recently successfully finished a trial that involved trading fixed income assets between some 40 banks which distributed ledgers across the five blockchains. The trial was completed just last month.
Microsoft CEO, Satya Nadella, during a keynote presentation noted that R3 was using blockchain technology that was available on Microsoft cloud system, Azure. The companies were using the service as a way to transform modern transactions and also change how settlements take place in the financial institutions.
The successful trial that the R3 did last month was supported by Azure cloud computing platform. The Amazon Web Service (AWS) was also used for some of its services. The two cloud computers were used to host distributed ledgers for the trial.
Microsoft made an earlier bet by debuting its Azure blockchain as a service late last year. The company has seen a strong number of supporters for its decision to adopt the blockchain technology. Other blockchain app makers like BitShares and Lisk and Slock it have also joined the Azure service.
“Today, there is a lot of time delay between a transaction and when the money flows, and there’s a lot of cost,” noted Nadella during his speech this morning. “And [by] using this distributed ledger technology and blockchain, you can change the landscape of the financial industry.”
Peggy Johnson, executive vice president of Business Development at Microsoft, in a statement said the technology “modernizes legacy financial processes, so trades of assets like stocks and bonds can be finalized in minutes, not days. And by enabling a more direct transfer of ownership, it eliminates the need for middlemen like clearing houses, both cutting costs and greatly reducing the risk of fraud.”