(Updates R3 comment)
By Anna Irrera
NEW YORK, April 27 JPMorgan Chase & Co has left
the mammoth bank blockchain consortium led by New York-based
startup R3 CEV, the latest member to depart over the course of
the company's fundraising process, R3 confirmed on Thursday.
R3, which counts about 80 financial institutions as members,
wants to raise $150 million from its members and strategic
investors and give them a 60 percent stake in R3.
"JPMorgan parted ways with R3 to pursue a very distinct
technology path which is at odds with the one chosen by the
global financial services industry, represented by our 80-plus
members," said Charley Cooper, a managing director at R3.
JPMorgan declined to comment.
JPMorgan's move follows the departure of other large banks
from the R3 consortium.
Goldman Sachs Group Inc, Banco Santander SA,
Morgan Stanley and National Australian Bank left the
group in quick succession in late 2016, as R3 proceeded with its
Like the other banks that have left the group, JPMorgan is
involved in other blockchain initiatives.
The bank is a member of the newly formed blockchain
consortium Enterprise Ethereum Alliance, and is an investor in
blockchain startups Axoni and Digital Asset Holdings. It also
participates in the Hyperledger Project, a cross-industry group
led by the Linux Foundation.
R3, which began operating in September 2015, seeks to help
the financial sector develop shared blockchain technology to run
some of their most cumbersome and expensive processes.
Blockchain is a distributed ledger of transactions that is
maintained by a network of computers on the internet rather than
a centralized authority. It first emerged as the system
underpinning cryptocurrency bitcoin, but banks are hoping it can
help them reduce the complexity and costs of activities like
international payments and trading settlement.
Skeptics have warned that the technology is still in its
early days and it might take many years before the financial
industry can reap any benefits.
Since it began operating, R3 has rapidly gained the support
from the world's largest banks, with members including UBS Group
AG, Deutsche Bank AG, Barclays Plc,
Bank of America Corp.
So far they have paid membership fees to participate in the
R3 had initially planned to raise $200 million from members
and give them a 90 percent stake in a new company. In November,
it lowered the target and said members would get a 60 percent
stake in R3.
Thomson Reuters Corp is also a member of R3.
(Reporting by Anna Irrera; Editing by Lisa Shumaker)