It seems as though fintech-ers are more interested in chatbots than blockchain these days, but that doesn’t mean distributed ledger technology has slid out of the spotlight.
Blockchain startup Chain made waves at the recent Money20/20 event when it announced what it’s calling the Chain Core Developer Edition: basically the release of open source blockchain code, free for developers to play around with–which includes a test network of universities including Cornell and and Berkeley as well as Microsoft. The name is taken from its enterprise blockchain network, Chain Core, which has been in development for two years.
This is the way of things. R3CEV released the open-source version of its Corda platform recently, and joined the hyperledger Project, which is open source through and through.
The most exciting development for banking and payments, however, may be that Visa is partnering with Chain in order to release what it’s calling Visa B2B Connect, an international payment solution for B2P payments.
“Think of us as an alternative to the existent correspondent banking; the SWIFT rails,” says Chain partner lead and head of payment Clint Gilliam, of the partnership. “We act as an infrastructure software provider; this is a Visa solution, a Visa product, a Visa network.”
By use of Chain Core, VisaB2B will let banks transfer money—or more accurately, transfer value— internationally through Visa’s own rails without the use of intermediaries. The network will be made available to banks who will then be able to offer it to their own corporate clients.
The primary difference between these networks and the OB blockchain (Original Bitcoin blockchain) appears to be the fact that these are private, ‘permissioned’ networks, closed off unless the participating enterprises allow access—cryptocurrency blockchains, by contrast, were designed to be open and decentralised, not particular traits with any historical appeal for bankers.
Permissioned networks are a preferred alternative for many in the financial space, since that essentially allows banks and other financial institutions like Visa the control they need in order to function in a world bracketed by increasing concerns around security and compliance.
“We don’t think of this an opposition; we consider ourselves problem-solvers. Just because something works for one use case doesn’t mean it’s the hammer you use for everything,” says Gilliam of the fact that Visa B2B will be a permissioned network. “Permission is just really replicating what already works in the financial world.”
Visa and Chain’s partnership is the latest in a string of banks and consortiums with the wish to potentially leverage blockchain for banking—it’s been particularly efficient when it comes to things like trade finance or cross-border transfers (think Ripple).
B2B Connect should make its debut at some point next year; if the network runs as expected the sheer volume of transactions Visa processes–as well as its partnership with over 17,000 financial institutions–might be enough to push blockchain into the payment mainstream all on its own.
To learn more about blockchain in banking, join us in Tel Aviv for Bank Innovation Israel this November 1-3.Register here.