Banco Santander (BME:SAN) has become the latest financial institution to exit R3CEV’s much marketed blockchain consortium.
Only less than 24 hours ago, American multinational Goldman Sachs (NYSE:GS) had confirmed dropping out of the aforementioned Wall Street blockchain league. The company, in its press statement, had cited its indifferences with R3 members regarding the upcoming equity funding round as its major reason to dropout from the group. It has been published that R3 will be raising around $150 million from its participating institutions by giving out 60 percent stake.
While Banco Santander, being an investor in Digital Assets Holdings along with Goldman Sachs, may have either found its participation in the consortium as a conflict of interest, the Spanish banking group appears to be more interested in allocating its development funds to its portfolio company, instead of working on a parallel blockchain initiative. It is also rumoured that Morgan Stanley and National Bank of Australia could be the next companies to leave R3.
As of now, other 42 original member banks seem to be in agreement with the restructured funding deal from the earlier intended $200 million to $150 million. The previous deal involved R3CEV giving out 90 percent of the equity to investors while holding on to the remaining 10 percent stake.
The funding amount will be raised by R3 over the next nine months to one year. However, not all the members of the consortium are expected to invest at the moment. The funding amount will be used to further develop blockchain applications for the banking and financial industry. These developments on the consortium’s part are also expected to contribute towards the progress of Linux Foundation led Hyperledger project.
R3 doesn’t expect all the member banks to stick with the program for long. Based on the changing needs more institutions may break away from the consortium while others join.