R3 and eight banks trial Intel Sawtooth Lake distributed ledger technology for bond trading

Financial innovation company R3, Intel and eight R3 consortium member banks have successfully tested a distributed ledger prototype for bond transactions using Intel technology.

The trial used US treasury bonds to demonstrate how distributed ledger technology can support trading in real-world financial markets, delivering the necessary scalability and supporting throughput of more than 100,000 transactions per day, said a statement.

R3 and its consortium members built and used an implementation of Sawtooth Lake, Intel's proprietary distributed ledger platform, along with Intel's Software Guard Extensions (SGX), a technology that enables developers to protect select code and data from disclosure or modification.

The trial was carried out in R3's lab environment, the R3 Lab and Research Centre, which has quickly become a centre of gravity for collaborative research andtesting of distributed and shared-ledger inspired technologies. R3, Intel and each of the banks used physical, non-cloud-based nodes hosted globally across the US, Canada, Asia, Australia and Europe to interact and simulate US treasurytrading on the ledger.

The platform featured advanced smart contract functionality, enabling trading, matching and settlement of US treasury bonds on-chain, as well as automated coupon payments and redemption based on network time and third-party data sources. Additional features included an on-chain identity registry to facilitate the permissioning of validators and transactors, and the association of those roles to different organisations.

Jerry Bautista, VP of the New Business Group at Intel, said: "We believe collaborative exploration of blockchain usages is key to the development of this emerging technology. We are excited to show how Intel technologies such as Software Guard Extensions can improve the security and scalability of blockchain deployments."

Tim Grant, CEO of R3's Lab and Research Centre, said: "Our goal at R3 is to bring our members together with the strongest technology players and work collaboratively to evaluate and accelerate this groundbreaking technology to production using real-world use cases. We are delighted to build on our strong relationship with Intel to demonstrate how distributed and shared ledgers can deliver material efficiencies throughout the full trading lifecycle of an asset."

R3 consortium members involved in this project included CIBC, ING Bank, HSBC, Scotiabank, Societe Generale, State Street, UBS and UniCredit. Intel will be donating the bond-related transaction families (software code written to simulate the behaviour of bonds on an exchange) developed for this project to the Hyperledger Project.

It will be running live demos of the platform at the Hyperledger booth (C90) at Sibos this week. R3 and Intel are premier members of the Hyperledger effort, and State Street is a general member.