Santander Follows Goldman’s Lead, Drops Out of R3 Blockchain Group

  • Grace Noto
  • November 23, 2016
  • 2

Banco Santander has also dropped out of the R3 CEV Blockchain Group. This news follows yesterday’s news that Goldman Sachs, one of the group’s original founders, chose not to renew its membership or invest further in the consortium.

Goldman’s move was potentially motivated by a conflict regarding fundraising terms, according to sources familiar with the matter.

A spokesperson for Santander confirmed that the bank was leaving the consortium; Santander’s move also follows the news that R3 has changed its goal for its latest round of equity funding through its bank members from $200 million to $150 million.

Santander was one of the original banks to join the consortium, which, at the moment anyway, includes more than 70 financial institutions across the globe.

Morgan Stanley and National Australia Bank have also chosen not to invest in the fundraising deal proposed by R3, as reported by Reuters.

R3’s funding round will continue to be raised in phases over the course of the next twelve month at the maximum, perhaps an odd choice considering that investment by individuals and banks in blockchain technologies appears to be waning.

While venture capital interest has been declining for cryptocurrencies such as bitcoin for a while now, despite the fact that these currencies were the first to utilize distributed ledger technology, interest in blockchain remains high but seems to be moving from the investment phase into a more developmental stage.

Like Goldman Sachs, Santander’s drop from the consortium does not speak to a lack of interest in blockchain itself, as the bank is also invested in other blockchain startups such as Digital Asset Holdings, which is run by Blythe Masters, a former JP Morgan executive.

More banks are continuing to explore the potential uses of blockchain independently—including Santander, which just this year launched the first blockchain for international money transfers in the U.K.

Update: Morgan Stanley will also be leaving the consortium, as reported by the Wall Street Journal. As noted here, the bank had already declined to participate in R3’s fundraising round, and will not be renewing its membership. This latest of banks to drop from R3 may say something about bank culture, according to some on Twitter.

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