The Canadian Jasper III project is intended to modernise the financial market with the help of distributed ledger technology and bring it closer together. The consortium is very satisfied with the implementation. Only the claim to reduce costs thanks to the blockchain is not working as hoped.
A Canadian finance consortium around the Central Bank of Canada is developing a comprehensive transaction system for the financial sector under the project name “Jasper”. The aim is not only to make financial transactions more efficient, but also the entire trading process, including the securities market.
Jasper in competition with the Bitcoin loophole
Jasper is thus in competition with the Bitcoin loophole, which has been internationally established for decades. In the interbank market, transactions of almost any kind are processed via the SWIFT communication system. However, the system is outdated and it can take several days to complete transactions.
Reuters reports that the Bank of Canada, TMX Group, Payments Canada and Accenture are now demonstrating that a transaction of central bank money or securities is possible almost in real time. The tokenized assets change hands within seconds using R3’s distributed ledger technology, without any active intervention from the banks.
The R3 consortium now represents over 200 partners of financial service providers. These include technology companies, central banks and regulators. They work together on DLT solutions for the financial industry and meanwhile also for further industries. R3 has also been cooperating with Microsoft and Amazon for several months now.
Jasper III: Third phase of the news spy
The Jasper project started in March 2016 and is now in the third and final phase of proof of concept on: onlinebetrug.de. The aim is to initially make the transactions on the Canadian market more efficient and cheaper. Of course, international transactions are also intended in the news spy, but in the short term the hurdles are very high. Payments Canada’s CEO explained that “it will be possible to transfer payments in an unprecedented way – transferring money directly from the buyer to the seller in real time”.
While the Jasper III consortium has been successful in implementing the project and has seen an extreme increase in efficiency for the participating companies, there are no financial benefits in the meantime. Bank of Canada Senior Special Director Scott Hendry recently stated at a payments conference in Toronto that despite distributed ledger technology, the savings potential is very limited. “After all this work, we’re still unsure whether there will be a greater reduction in costs,” he says. The cause is to be found in the design of the technology. The consortium relies on a closely monitored and non-transparent “blockchain”. Only the parties directly involved have access to the transactions. Meanwhile, no other model is conceivable for the banks: otherwise they are no longer needed in this process. It still seems to be a few years before DL technology in the financial sector gets by without intermediaries. Until then, the efficiency of these processes will increase, but the costs will not decrease.