Blog by: Isabelle Corbett, Head of Regulatory Affairs and Partnerships, R3
From the beginning, Corda has been built to help improve business and commerce done within the regulatory environment. As the head of R3’s Regulatory Affairs team, I have been focused on two broad areas within this: (1) helping regulators understand and become comfortable with blockchain technology (and Corda specifically) being deployed in regulated markets; and (2) showcasing how end users (the “regulated entities”) could use Corda to ease the burden of regulatory compliance. The first is a prerequisite; the second is a benefit. But over the last few years, and after many air miles logged, I have realized that there is a third regulatory angle: the opportunity for regulators (and the public sector generally) to deploy Corda themselves to solve their own challenges.
Confessions of a Regulatory Road Warrior
We knew that on the way to moving the world’s most important markets onto a new technology we would have to do a little explaining, so the R3 Reg Affairs team packed our bags and traveled around the world to sit down face to face with the regulators. We have circled the globe a few times, meeting with over 100 regulators in over 30 countries, which gave us a front row seat to watch regulators come up the curve on their blockchain learning. We talked about the technology, explained our Corda platform, and fielded questions (and more questions . . . and then more questions). We also heard a lot about regulators’ hopes, dreams, and fears about blockchain. Fast forward nearly three years since our first meeting, and the progress has been tremendous. Regulators have evolved from the information gathering stage to now devoting resources to fintech sandboxes, doing deep dives on Corda use cases, and, in several instances, working with us to build custom solutions on Corda. Some regulators remain in wait and see mode, yet more and more of those in the “wait and see” camp are feeling at least some pressure – from policy makers, peer regulators, constituents, and even from the competitive threat of other regulators getting too far ahead – and are increasingly ready to get started with blockchain technology.
This ramp up of activity has occurred as blockchain technology has matured. We have said – and have now shown – that 2018 is the year of production. Corda was open sourced in November 2016, and since then we have received input from thousands on the platform, created observer nodes (nodes with read only access) that will be used by regulators, enhanced stability and security and released Corda Enterprise, a commercial distribution of Corda open source, in July of this year.
Moving the Public Sector onto Corda – underway, yet only just begun
The same design features that make Corda the blockchain for business also make it ideal to help with the challenges faced by the public sector. Most importantly, Corda is built with limited data sharing, which means only those who have a need to see information can see it. That includes regulators. Regulators have faced a tremendous amount of criticism post-2008, centered around challenges like ensuring accurate and timely monitoring of risk exposure and effectively the data that is within their walls. In short, the public sector needs to figure out the riddle of improving their effectiveness at monitoring their specific jurisdiction . . . all while doing so at a lower cost. In this piece, John Reynolds of Blockchain Digital, a UK company and R3 partner, explores the utility of a platform like Corda in responding to that exact call.
This is why I’m making it a priority to engage with the public sector, not only about policy, but about using Corda. The opportunities for blockchain to be deployed in the public sector are many – and some public sector entities are already working on blockchain.
Our CEO announced at our September CordaCon in London to the audience of 800+ that Her Majesty’s Land Registry chose Corda as the blockchain platform to further its goal of ensuring the HMLR is “at the forefront of global land registration innovation.” HMLR is not the sole land registry being built on Corda. Since the announcement, which was spread even further by the recent press release, we’ve gotten huge amounts of inbound interest from land registries around the world who want to use Corda to do the same. In addition to registries, some examples of near-term blockchain deployments in the public sector include:
The benefits reaped by deploying blockchain in the public sector are only enhanced by deploying it across government functions. So, while we’re already building solutions to be deployed in the public sector, we need to be doing more. We are raising awareness of Corda as a public sector solution in not only government agencies, but raising awareness of Corda at those who serve government agencies. We are doing that both directly with government agencies and through our partners – those who sell into the government and those who advise the government.
In pursuit of this new focus we’re asking those at R3, those partnering with R3, those building on Corda, and those servicing the public sector to keep reaching out to us about opportunities to put Corda in the public sector, moving regulators toward more reliable, more transparent, more efficient regulation.