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R3’s Rutter: SIX project “the most ambitious we’ve seen”

The CEO of R3 discusses how the vendor won the contract for SIX Group’s proposed digital asset exchange.



David Rutter, R3

“SIX is the most ambitious project we’ve seen,” said David Rutter, co-founder and CEO of blockchain enterprise vendor R3.

He referred to SIX Group, the Swiss stock exchange operator, that had just selected R3 to build for it a digital asset exchange. 

Other exchanges with blockchain projects are either replacing a portion of their infrastructure (such as ASX with its post-trade workflows) or addressing a single asset class (such as startup TradeWind, for commodities).

“This is a new platform involving the end-to-end lifecycle of the trade,” Rutter toldDigFinof the SIX mandate.

Digital exchange

SIX, when announcing the project, said it would first list digital native equities to the new exchange, with Corda used to handle primary issuance, secondary trading, and pre- and post-trade processing. It will follow with bonds, funds and structured products, and then begin to tokenize some of the existing securities held in its central depository.

Capital markets is relatively new turf for R3, which is better known for working in the areas of trade finance, such as Project Voltron, and insurance, where European consortium B3i last year dumped IBM Hyperledger in favor of R3’s product, which is named Corda. 

Had we not gone through the DTCC project, we wouldn’t know if we could support SIX

David Rutter, R3

But Rutter says SIX approached R3 last year partly because it wanted an end-to-end solution, and because R3 and Digital Asset were the only two enterprise blockchain providers that got through a test carried out by the Depository Trust and Clearing Corporation.


DTCC, which processes virtually all securities transactions in the U.S., had wanted to see whether blockchain tech could be fast enough and scalable enough to process its 150 million of daily equity trades. That meant transaction processing on Corda and Digital Asset had to reach 6,000 transactions per second (TPS). 

In reality, Rutter says, that meant Corda had to gear up to 18,000TPS, by using various optimization techniques.

(For the geeks: this included sharding, which breaks up trades across the network, to get around requiring every single node to process every single trade. Another technique is load balancing, in which some nodes can verify trades without storing the full database record.)

“Had we not gone through the DTCC project, testing the limits of our throughput, we couldn’t have known whether we can support SIX’s ambitions,” Rutter said.

New build

R3 is now designing a centralized matching engine, while the pre- and post-trade workflows will be distributed.

The vendor doesn’t build applications, however: Corda sticks to the operating model and the business logic, and lets clients build the apps and end-user interfaces. So it brought in Accenture to design the front-line apps for SIX.

We’re about to be hit by a new wave of mature, regulated token issuance

David Rutter, R3

Rutter says there won’t be a need for DTCC-level scale or speed when SIX launches its digital asset exchange later this year. “But you want to have the technology to match your ambitions,” he said.

Cloud costs

One surprising outcome of the DTCC test, however, was the bill. R3 and Digital Asset weren’t the only ones exceeding expectations: so did the costs of cloud-computing required to support their work, which made DTCC shut the experiment down as soon as the two vendors reached their targets.

Rutter didn’t have any specific ideas about what might happen to computing costs in a high-volume digital asset exchange. He says enterprise blockchain, because of its permissioned nature, means data is only shared with relevant parties, instead of being broadcast across the entire network. This makes it more efficient.

Meanwhile, most financial institutions are building on-premise cloud capabilities (that is, relying on their own servers). This is expensive up front, but could pay off if they have to do a lot of computing in the future.

Mostly, though, he reckons the marketplace and competition will probably bring down cloud-vendor costs for their most valuable customers.


Looking ahead, he sees SIX Group is leading what will be a broader move toward digital assets. “Tokenization of everything has been picking up over the past three months,” he said – while also mentioning R3’s Corda Settler, a product to let banks using Corda to effect payments on SWIFT’s GPI rail.

“The Ethereum community was behind the first wave of tokens,” Rutter said. “We’re about to be hit by a new wave of mature, regulated, and compliant token issuance – tokens that represent securities, insurance policies, you name it.”

Rutter met DigFin at the company’s newly opened Hong Kong office. Singapore, however, remains R3’s main hub in Asia Pacific. Mainland China has been tough to crack, although he and his team – including Carl Wegner, head of Asia, and Doris Teo, head of Hong Kong – are trying to find mainland partners.

But Rutter doesn’t see mainland Chinese tech as a direct competitor outside of China. Chinese blockchain vendors are present in Singapore and Hong Kong, but mainly for trade platforms connected to mainland China. 

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