Revealed exclusively to CoinDesk, Cordite, an open-source community that’s independent from R3, but building solely on the code it pioneered, is about to come out of stealth mode. Cordite promises to do for enterprise blockchains what the ERC-20 standard did for ethereum: allow the creation of different tokens representing various kinds of assets on the same network.
The difference is that Cordite is designed specifically for use by the banking industry. Indeed, the main contributor and community leader of the project is one of the world’s 30 largest financial institutions, the Royal Bank of Scotland (RBS).
So whereas ERC-20s unleashed the initial coin offering (ICO) boom, enabling startups across the globe to bypass the usual fundraising hurdles and raise billions from the public by creating exotic new tokens, Cordite will allow digital representation of mryiad assets traditionally held and traded by highly regulated institutions.
In this way, blockchain networks could become more useful to these large companies, since they could track both sides of a trade – cash for securities, for example, or one type of foreign exchange for another – on the same ledger, rather than having one leg of the transaction occurring off-chain.
Richard Crook, the head of emerging technology at RBS, told CoinDesk:
“As we move to the next level of building distributed apps in the enterprise space, there is going to be a need for tokens and units of value on these ledgers.”
For example, Crook said, “if I am building an invoice platform for trade finance, when the invoice goes one way, I need a digital asset that you and I agree is worth something coming back.”
Nevertheless, there’s a certain irony here.
Founded in 2014, R3 was designed to be the regulation-friendly shared-ledger provider, one that drew a contrast to cryptocurrency chains and their “anarchic” approach to governance.
Now, with this new project, it will technically become possible to run an ICO on R3’s flagship Corda software, albeit unlikely. Rather, Cordite is being positioned as an answer to a range of challenges facing the developers of distributed ledger technology (DLT) inside banks and corporate entities.
But whatever the truth may be about the privately held firm’s cash position, the emergence of initiatives like Cordite suggests that there’s a vibrant open-source community growing around the technology R3 developed. According to R3, Cordite is just one of many “CorDapps” about to be released.
“Cordite is not something that R3 invented, it’s something that the community itself saw a need for and went to build,” said Richard Gendal Brown, R3’s CTO.
“People building stuff on Corda that didn’t have to ask permission tells me we are succeeding and that Corda is developing as a genuine platform.”
Indeed, Crook at RBS said Cordite was underway before he got involved. He happened upon the project about six months ago and found there the answers to many of the challenges facing firms building enterprise DLT projects.
“I won’t name them, but it’s the same sort of companies that are members of R3 who are contributing to Cordite,” he said, adding that the project remained in private alpha mode for the last six months as everyone involved wanted to get the testing right.
Stepping back, Cordite is also one of several examples of corporate technologists experimenting with fiat cash on distributed ledgers in one form or another. Also, some very large firms are looking at internal tokens as a way to connect their treasuries or move money across the world without doing currency conversions...