R3 Intervenes And Fails In Blockchain-Based Utility Settlement Coin (USC) Project
Blockchain-related news outlet, Coin Desk, has recently published a post in which distributed database technology firm, R3, tried to sidetrack a project dubbed, “Utility Settlement Coin” (USC) in what seems like an attempt to lure the latter to conduct its project on the former’s platform. Due to several reasons along with the decision taken on behalf of USC’s 17 association members, R3 was rejected.
As per the post, R3 came up with a proposition in which USC’s bank members would consider building their project on R3’s Corda platform, as opposed to that of Clearmatics. A major reason that contributed to R3’s rejection was the fact that the project has surpassed development stage and has since reached “Phase IIIb” by August 2018.
Despite realizing that R3 was too late to get into the game, the firm supposedly tried to induce bank partners with potential funds for the project’s “technical development and to pay a share of legal fees.”
The Managing Director of R3, Charley Cooper was quoted saying the following,
“We believe in open standards for critical parts of blockchain market infrastructure, such as cash and value on ledger, because such standards will benefit the whole industry. Part of our role is to identify opportunities for discussion with potential partners.”
So, it comes of no surprise that R3 wanted to get involved in the USC project, however, whether their approach was appropriate is questionable. According to Coin Desk, R3’s decision to sneak its way into the USC project comes from the fact that the firm wanted to “leverage work already done on cash settlement on its Corda platform”.
Since the USC combines nearly 17 banks, R3 trusts that pooling in all the resources to create a platform that houses all the “legal and regulatory intellectual property (IP)” would be ideal. Due to this reason, R3 also offered to put in its shareable IP “from projects done in collaboration with over 50 central banks, regulators, and commercial banks.”
Based on existing information, USC’s 17 banks are well known banks, some of which include Barclays, CIBC, Credit Suisse, HSBC, MUFG, State Street, UBS, Deutsche Bank and NEX.
As for the viewpoints of those already involved in the USC project, many felt R3’s approach to get itself into seemed “aggressive”.
An unnamed source who knows about the project was quoted saying,
“R3 is a business like any other and it probably didn’t cross the line of sharp business practice.”
Furthermore, a source told Coin Desk that accepting R3 would possibly hinder the progress that has been made thus far. In particular, with the legal aspects taken care of for Phase IIIb, it supposedly did not make sense to welcome R3, as it would “derail going into that phase [Phase IIIb] or delay the project.”