XDC Network and R3 Corda complete inter-business settlement PoC

SBI XDC Network APAC, a joint venture with TradeFinex Tech, and SBI R3 Japan have successfully completed a proof-of-concept experiment that was previously announced in December 2023 as the JV’s first initiative.

The PoC demonstrated that value via digital assets can be transferred over different distributed ledger technologies (DLT), in this case the XDC Network and the R3 Corda platform, as a form of payment to improve efficiency and facilitate inter-business settlement in trade transactions.

Furthermore, to deepen the collaboration between the XDC Network and Corda within the SBI Group and to expand the use cases of Corda Bridge, the ownership of the Corda Bridge used in this experiment will be transferred to the joint venture company SBI XDC Network APAC.

The partnership between the SBI Group and the XDC Network, which started on May 31, 2023, with the launch of the first domestic handling of the XDC cryptocurrency by SBI VC Trade, will enter its second year.

Through these initiatives, the partners aim to realize the construction of a new foundation that contributes to the efficiency and smoothness of inter-company settlements in trade transactions.

Background and Purpose of the Proof-of-Concept Experiment

This experiment connected two different DLT platforms using the Corda Bridge: the private blockchain Corda, which emphasizes privacy and excels in interoperability and scalability for inter-company transactions, and the hybrid Layer 1 public blockchain XDC Network, which aims to streamline trade finance and is highly compatible with private chains, focusing on the use case between companies.

The experiment involved conducting legal currency settlements via inter-company transactions using the native token “XDC” , allowing for one-stop execution of instant settlements, encompassing both private areas like transaction information and public data like value transfer, resulting, in an efficient and smooth settlement method for international trade transactions, offering advantages in both significantly reduced settlement time as well as cost savings compared to traditional legacy payment transactions.

Evaluation of the Proof-of-Concept Experiment

In this experiment, the simultaneous execution of “transaction information approval” and “settlement,” which are essential requirements for financial transactions, was conducted between SBI Group companies, simulating exporters and importers. It was confirmed that immediate remittance is possible.

From a technical perspective, the design that allows R3 Corda CorDapp, XDC Network and the bridge component to be implemented independently confirmed that the XDC settlement function can be generically implemented for use cases in addition to the settlement use case of this experiment.

This was the first hybrid proof-of-concept experiment on the XDC Network with other blockchain platforms, and it was reconfirmed in practice, not just in theory, that value transfer across differentDLT is possible.

Future Development

When considering immediate settlement between actual companies, additional verification of systems that are not affected by fluctuations in the price of XDC and foreign exchange fluctuations is necessary. For this verification, collaboration with cryptocurrency exchanges is essential.

Based on the results demonstrated in this proof-of-concept experiment, the partners will continue to collaborate and discuss within the SBI Group to address the challenges toward social implementation. This includes working with SBI VC Trade and SBI Liquidity Market to build services that mitigate the risks of cryptocurrency price fluctuations and foreign exchange fluctuations, further facilitating inter-company transaction settlements.

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