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00:00STOCKS GOING EX DIVIDEND. OUR NEXT GUEST IS CEO AND FOUNDER OF A COMPANY WHICH IS BUILDING WHAT IT DESCRIBES AS THE NEW OPERATING SYSTEM FOR FINANCIAL MARKETS. THE PLATFORM IS BASED ON BLOCKCHAIN, THE SYSTEM BEHIND BITCOIN. YOU KIND OF WANT TO DIFFERENTIATE BETWEEN CRYPTOCURRENCY AND WHAT HAPPENS IN BLOCK CHANGE -- BLOCKCHAIN. DAVID RUTTER FROM R3 JOINS US. COMPANIES, FINANCIALS, BANKS ARE TRYING TO FIGURE OUT HOW TO MAKE BEST USE OF BLOCKCHAIN. WHAT ARE THE QUESTIONS? IF THERE IS A BOARD MEETING TAKING PLACE AND I WANT TO FIGURE OUT HOW TO TRANSFER MY LEDGER TO BLOCKCHAIN, WHAT ARE THE QUESTIONS THAT I NEED TO ASK YOU ABOUT HOW IS GOING TO WORK? DAVID: I THINK WHAT WE SHOULD EXAMINE IS THE FACT THAT BLOCKCHAIN IS IN THE BOARD ROOM TO START WITH, BECAUSE THAT IS THEIR IMPORTANT. BECAUSE OF THE HYPE CYCLE, ACROSS THE FINANCIAL INDUSTRY, WELL KNOWN AT THE BOARD AND CEO LEVEL. GUY: THEY ARE COMPLETELY AT BAY WITH THE TECHNOLOGY, THEY UNDERSTAND THAT APPLICATIONS. DAVID: I THINK AT A HIGH-LEVEL THE UNDERSTAND THAT THIS IS A ONCE IN A GENERATION OPPORTUNITY TO CHANGE THE WAY THAT THEY DO BUSINESS, TO DRIVE SUBSTANTIAL COST SAVINGS INTO THEIR INDUSTRY. IN THE PAST THESE FIRMS HAVE BUILT SYSTEMS JUST FOR THEIR OWN ORGANIZATIONS. THEY HAVE NOT LOOKED ACROSS THE INDUSTRY AND THOUGHT ABOUT HOW THEY COULD DO THINGS WHERE IF THERE IS A NON-DIFFERENTIATING TECHNOLOGY, WE CAN SHARE THAT COST AND EXPENSE WITH THE INDUSTRY TO DRIVE CHANGE, AND TO DRIVE SAVINGS. I THINK THAT IS AN IMPORTANT PART OF WHAT IS GOING ON TODAY. MATT: HOW DO YOU RECOMMEND THAT FINANCIAL COMPANIES -- YOU KNOW, THE CLIENTS THAT YOU WANT TO HAVE, USE THE BLOCKCHAIN? DO THEY BUY BITCOIN? DO THEY CREATE THEIR OWN INTERNAL BLOCKCHAIN? I DON ' T UNDERSTAND HOW IT WOULD WORK UP FROM THE BLOCKCHAIN THAT ALREADY WAS -- EXISTS FOR BITCOIN. DAVID: JAMES: WE ARE BUILDING -- DAVID: WE ARE BUILDING AN OPERATING SYSTEM FOR FINANCE WHERE FIRMS CAN ENTER TRANSACTIONS AND SHARE THAT RECORD. WHAT THEY SEE IS WHAT THEIR COUNTERPART TO SEE. EACH FIRM RECORDS THEIR OWN TRANSACTION BEHIND A FIREWALL TODAY, DUPLICATING DATA TIME AND TIME AGAIN, AND THEN RELIED ON THIRD-PARTY RECONCILIATION SERVICES TO EVALUATE THAT DATA. BITCOIN AND ETHEREUM INSPIRED THE USE OF THESE TECHNOLOGIES. BITCOIN IS A PUBLIC LEDGER. WE ARE A PERMISSIONS PRIVATE LEDGER. WE ARE BUILT FOR ENTERPRISE AND HIGH-LEVEL TRANSACTIONS. WE ARE NOT USING CRYPTOCURRENCY -- DIFFERENTIATING BETWEEN PUBLIC BLOCKCHAIN ' S AND CRYPTOCURRENCIES, AND WHAT WE ARE TRYING TO DO, WHICH IS TRY TO BUILD AN OPERATING SYSTEM FOR HIGH-LEVEL FINANCE. IT IS A DIFFERENT STORY ALTOGETHER. MATT: SO YOUR PLATFORM HAS NO LENGTH TO THE PRICE OF CRYPTOCURRENCIES THAT WE TALKED ABOUT THAT ARE IN POPULAR CULTURE, THAT ARE SO POPULAR RIGHT NOW. WHAT DO YOU THINK OF THE PRICE OF BLOCKCHAIN? I KNOW THAT RIPPLE IS A CURRENCY IN WHICH YOU HAVE INTEREST. WILL IT RECOVER? DAVID: AS FAR AS THE PRICE OF BLOCKCHAIN, I DON ' T REALLY KNOW HOW TO ANSWER THAT, BECAUSE AS I SAID -- MATT: SORRY, THE PRICE OF BITCOIN. DAVID: I DON ' T HAVE A PARTICULAR VIEW ON BITCOIN. I LOOK AT THE CRYPTOCURRENCIES THAT EXIST. I DO FIND CRYPTOCURRENCIES AS A CURRENCY THAT HAS NO BACKING. IT IS JUST BACK TO BUY THE FATE OF THOSE THAT OWN IT. THERE IS ROOM FOR BITCOIN TO EXIST. THERE ARE HUNDREDS OF OTHER CRYPTOCURRENCIES OUT THERE TODAY. THERE HAS BEEN AN ICO GRACE. MOST OF THESE CURRENCIES IN MY OPINION. DO NOT HAVE A REAL PURPOSE. GUY: DAVID, THANKS FOR SAYING US THIS MORNING -- SAYING US THIS MORNING -- SEEING US THIS MORNING. DAVID RUTTER FROM R3.

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R3 CEO Says Blockchain Is a Once in a Generation Opportunity for Financial Markets

David Rutter, founder and chief executive officer at R3, discusses building blockchain for financial markets. He speaks with Matt Miller and Guy Johnson on “Bloomberg Markets: European Open.” (Source: Bloomberg)

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