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Financial services

Italian Financial Institutions are Now Using R3 Corda Blockchain for Transactions

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Italian banks have recently embraced the R3 Corda blockchain network to boost the authenticity of transactions in banks across the country. More banks are now transitioning from the legacy interbank reconciliation infrastructure to the blockchain platform as a major overhaul of the financial institutions. According to recent reports, as many as 55 banks, which constitute 85 percent of all Italian banks, have migrated to the R3 Corda Blockchain platform.

Italian banks in stage two of R3 Corda blockchain trials

The Italian Banking Association has already set things in motion for the second stage of R3 Corda blockchain trials. This comes after the successful completion of phase one trials. The third and final phase of the tests is expected to be conducted by the start of October. Also,85 percent of the banks have already shifted to the platform since the launch of the second trials, in a move geared towards sharing inter-bank data.

The association predicts that by the start of the third phase, the number of banks embracing the technology will have steadily increased from the current 55 to up to 100. Technology has been lauded for its various benefits and has been seen by many as an upgrade. The Chief Innovation Officer of the Italian Banking Association, Silva Attanasio, has revealed the association’s plans to create a decentralized structure called Spunta, built above R3 Corda.

Blockchain technology a perfect fit for the financial sector

Before the adoption of R3 Corda blockchain platform, reconciliation infrastructure efforts regularly tended to consume a lot of time. It took from 30-50 days, but now after the implementation of R3 Corda; reconciliation happens in less than a single day.

Furthermore, rumors have it that the Italian Banking Association is also planning to test out the digital Euro in the banking sector.  These reports are yet to be confirmed, since no formal public announcement has been made at the moment.

Wirecard to Resumes Operations After FCA Lifts Restrictions

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The U.K. Financial Conduct Authority ( FCA) announced on 29 June that it would lift the restrictions imposed on the German payment firm Wirecard AG, allowing Wirecard to resume operations. The watchdog noted that it had provided a written agreement to Wirecard ‘s subsidiary, Wirecard Card Solutions, to resume its e-money and payment services, although some limitations remain.

The UK financial watchdog ordered the e-payment firm to halt operations on 26 June, following the submission by its parent company of an insolvency application in Germany. The move to lift the ban allows the users of the firm to access the financial services they have been locked out.

Wirecard’s clients can now access financial services

The limitations imposed on the fintech firm include not being able to dispose of any assets or money, not to run any regulated activity, and put a statement on its official website notifying users that it is no longer authorized to carry out regulated activities. Nevertheless, clients can now use their debit cards freely without interruptions. A statement by FCA reads:

“We know that some people may have faced difficulties over the weekend and we worked with DWP, HMT and the Home Office in order to help anyone suffering financial distress. Anyone who is still in difficulties should see our website for more details.” 

Insolvency proceedings

Despite the lifting of the restrictions by the FCA, experts suggest that the issue could have permanent damage to people’s trust in fintech firms. In particular, firms such as Curve and Anna rely on their e-money licenses to manage payments but do not hold banking licenses to hold client funds. The funds are instead ring-fenced with a third party financial institution.

Germany-based Wirecard has stated that it will continue to operate despite insolvency filings last week. The company also stated that it is exploring whether its subsidiary firms will also be required to apply for insolvency. In addition, the American subsidiary of the company which it acquired from Citigroup in 2016; stated on 29 June that it was looking for a buyer.