Goldman Sachs Leaves R3CEV Consortium — But Stays in Blockchain

  • Grace Noto
  • November 21, 2016
  • 0

The R3CEV blockchain consortium will lose one of its founding banks as it continues to explore blockchain in the new year.

Goldman Sachs has chosen not to continue working with the group despite its previous participation as one of nine founding banks back when R3 was founded two years ago.

Does this mean Goldman has lost its interest in the potential of blockchain? That seems unlikely, according to Chris O’Brien, founder of Linchpin Partnerships.

O’Brien told Bank Innovation:

I’d say it sounds more like a vote of ‘no confidence’ in R3 than in the blockchain itself. The interesting question will be: do other prominent banks follow?

As Goldman Sachs will reportedly continue to explore blockchain technology on its own, and counts among its many investments blockchain companies such as Circle, that seems to be the case.

Whether other prominent banks follow its example will depend on the resources of the bank in question, as well as the incumbent’s approach to financial innovation.

Says R3 of the move:

As with any project of this scale and scope, we always expected the make-up of the consortium to change over time. 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.

According to a recent study by Coindesk, while interest in blockchain or in distributed ledger technology remains high, especially for banks and other financial institutions, venture capital interest in funding saw a bit of a decline in the last quarter.

This could be due to the fact that more and more banks are running independent blockchain projects, with 70 separate blockchain proof-of-concepts being announced in Q3 2016, according to the study.

Says Peter Loop, Associate Vice President and Principal Technology Architect for Infosys, a global leader in technology services and consulting:

2017 will be the year of blockchain: Despite misconceptions that blockchain is years away, we’ll see full deployments in financial services, insurance and healthcare industries next year. This will completely disrupt our payment systems on an international scale – revenue models and other processes will become obsolete, and payment methods will become faster, cheaper and safer.

Whether or not Goldman Sachs will be the one to usher in the much-awaited Year of the blockchain with its own project remains to be seen.

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