Will the Enterprise Ethereum Alliance Be the New R3 for Banks?

Blockchain is back in vogue with banks. Well, Ethereum blockchains, anyway.

The Enterprise Ethereum Alliance (EEA) seeks to provide space for projects based on Ethereum. The group was officially launched today, and its 27-plus membership list includes some big names, like BBVA, Credit Suisse, J.P. Morgan, and Santander.

“The initial list of members was inspired by who has built the most blockchain in the past, but that’s not the end goal. The end goal is pervasiveness,” Jeremy Millar, founding board member of the EEA, said during a panel at the group’s official launch event taking place today in New York.

Along with enterprise Ethereum groups such as ConsenSys, the founding members of the group include banks that have all developed blockchain projects prior to joining. Santander has been particularly prolific with blockchain projects, having launched a few stand-alone projects exploring the area in past years.

The bank was also a member of the R3 Consortium— one of the largest collaborative blockchain projects — until late last year, when it followed Goldman Sachs and Morgan Stanley out the door.

So what makes this collaborative blockchain project different from the last one?

According to Joseph Lubin, founder and CEO of ConsenSys, the difference might be structure—taking development use case by use case.

While R3 focused on the development of a unique code, Corda—also based on Ethereum—the EEA will be exploring different codes and different blockchain structures to support enterprise arenas such as inter-bank payments and securities settlements.

The big goal is to erase the debate between the benefits of “permissioned” blockchain, as opposed to open-source or non-permissioned blockchain by working on both, depending on individual need.

In other words, one blockchain could be set behind a firewall—i.e., permissioned—if privacy is very necessary to that particular enterprise process, such as dealing with regulators. Other, less sensitive projects, would not have this block in place.

“[It’s] the idea that you can swap out the consensus algorithm based on your environment,” said Andrew Keys, global head of business development, ConsenSys, at today’s panel. “The ability to swap out this consensus will give us true interoperability.”

The initial response to EEA’s launch has been favorable. However, whether it will survive the consortium fatigue that seems to be growing for banks remains to be seen.

To learn more about Ethereum and blockchain consortiums, join us in San Jose on March 6-7 for Bank Innovation 2017, where the best conversations in fintech take place. Click here to register.

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