One of R3’s earliest members has left the banking-centric blockchain consortium that sees a number of the world’s largest banks among its members.
JP Morgan, the largest bank in the United States, has become the latest banking giant to exit the global banking blockchain consortium led by New York-based industry startup R3. Back in September 2015, CCN reported about JP Morgan joining R3’s ranks as one of the consortium’s first nine members.
The exit was confirmed by a Reuters report, which offered some eye-catching details. For context, JP Morgan was among a list of banks rumored to be quitting R3 last year as the New York startup sought to raise $200 million from its members in a major round of equity funding. Goldman Sachs, also one of R3’s earliest members, decided against renewing its membership with R3 in November 2016.
R3 lowered its fund-raising target to $150 million in exchange for 60% of equity whilst modifying the structure of the deal, reportedly making it more fruitful for potential investors among member banks. However, November also saw Banco Santander – Spain’s largest bank – leave the consortium. Investment bank Morgan Stanley was also rumored to join Goldman Sachs and Banco Santander in leaving the consortium. It eventually did, toward the end of the year.
While it could be inferred that these banks did not seek to participate in R3’s equity funding round, few details have been revealed as to the reasons behind their exit.
In the case of JP Morgan’s exit, an R3 executive has pointed the finger firmly at the bank for going rogue in taking a different path than the one tread by the consortium’s member banks and the global banking industry.
Charley Cooper, managing director at R3, stated:
JP Morgan 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.
JP Morgan’s blockchain research and development endeavor shows a market choice in the development of Quorum, its private blockchain based on Ethereum. At an early stage of development, Quorum developer Jeffrey Wilcke, also an Ethereum core developer, called it a “minimalistic fork of the Go Ethereum client” in a previous conversation with CCN.
JP Morgan was also the lead investor in possible R3-competitor Digital Asset, in a $50 (+) million funding round in early 2016. The banking giant is also a member in the Linux Foundation-led Hyperledger Project.
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