R3 seeks to play-down bank departures

R3 seeks to play-down bank departures

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Blockchain consortium R3 has played-down speculation over its future after three of its top backers quit the group by saying it "always expected the make-up of the consortium to change over time".

In the past week, banking giants Goldman Sachs, Santander and Morgan Stanley have decided to leave R3, according to media reports, prompting speculation over its future. 

A spokesperson for R3 told FOW in a statement: “R3 has built a working consortium of over 70 banks and other institutions which has become the de facto centre of gravity for the development of distributed ledger technology in the wholesale financial markets. As with any project of this scale and scope, we always expected the make-up of the consortium to change over time."

The spokesperson added: "Developing technology like this requires dedication and significant resources, and our diverse pool of members all have different capacities and capabilities which naturally change over time."

The group also continues to add new members, with ABN Amro, Fifth Third Bank, Suncorp and Synchrony Financial, joining in recent weeks. The departure of the three banking giants, however, has led to speculation over the future of the group. 

“The crux of the issue is not to do with the interest in or potential of blockchain technology, but to do with the commercials of the business model. It’s not yet clear how this is going to work, other than the banks are adamant they are not going to create another commercial entity that can hold them over a barrel when it comes to operating fees," Nick Weisfeld, data practice head and blockchain specialist at tech consultancy GFT, told FOW.

Weisfeld suggested R3 competitor Digital Asset Holdings could be close to releasing a platform like Corda, R3’s flagship technology set for release at the end of this month.

Since the start of last year, the finance industry is said to have ploughed more than $1 billion into blockchain technologies. Major banks and exchanges are either funding start-ups or developing the technology internally while the US regulator recently called for "do no harm" regulation.

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