The Commonwealth Bank of Australia joins a blockchain research project R3, becoming the ninth of the world's investment giants openly interested in the distributed ledger technology.

The initiative backed by Barclays, BBVA, Credit Suisse, JPMorgan, State Street, Royal Bank of Scotland, UBS and now the CBA is aimed at developing industry standards and protocols for using the blockchain in banking.

The project is being led by a New York- and London-headquartered start-up headed by David Rutter who is the former CEO of ICAP Electronic Broking with a 32-year Wall Street experience. Speaking to Business Insider, Mr. Rutter revealed the essence of the endeavour, which is to build the blockchain “fabric” for banking and to establish consistent standards for using it in the financial industry.

The head of the CBA's institutional banking and markets, Kelly Bayer Rosmarin shares same views, saying that the blockchain, now used mostly to transfer the bitcoin digital currency, is being seen as a potentially successful alternative means for transferring money in general. What the CBA is interested in, according to Ms Rosmarin, is to find out whether the blockchain provides the opportunity for banks to transfer money more transparently and at lower costs.

Another potential advantage of the blockchain for financial corporations is to move away from relying on central banks. 

The blockchain technologies itself may greatly benefit from more well-known financial institutions using the distributed ledger.

For more than three months already, the Commonwealth Bank of Australia has been working with Ripple Labs who are developing a blockchain-like technology to allow banks to share information between them.

The Commonwealth Bank, founded in 1911 as a government bank and privatised in 1996, is one of the ‘big four’ Australian banks, together with National Australia Bank, ANZ and Westpac. It has 11 million customers, most of them in Australia and Oceania. It is usually credited with being very innovative: it was the first local bank to offer P2P money exchange through its mobile app and to allow NFC payments on mobile phones. Now the Commonwealth Bank app is used by 3.5 million customers.

Maria Rudina