Consortium reduces fundraising goal.
Morgan Stanley is set to become the latest big bank to drop out of the R3 blockchain consortium.
Following the departure of Goldman Sachs earlier this week, Morgan Stanley, Santander and National Australia Bank are the latest big names to withdraw their membership.
According to a WSJ source, Morgan Stanley will not renew its membership in the R3 CEV LLC blockchain group or invest in a $150m equity funding round.
Goldman Sachs has already let its membership lapse and decided not to invest any equity, while Santander is another name reported to have dropped out.
The fallout from this has seen the group reduce its fundraising goal from its next round to $150m from $200m.
While some big names have departed the likes of Bank of America, Barclays and the UBS Group still maintain a membership, although no comment has been made on whether they will make an equity stake.
The exodus from the group is reported to be in part due to the large number of blockchain consortiums and joint investment initiatives around the technology that have appeared over the past few years.
R3, which is looking at the use of blockchain distributed database technology in Wall Street infrastructure, is one of the biggest groups associated with the technology but many banks such as Barclays have also sought collaboration independently with blockchain outfits such as Wave.
According to Fortune, Goldman Sachs left the group after failing to agree on terms of a prospective fundraising deal.
Given the amount of work that’s being done around the technology it is understandable that big banks assess their partnerships.
Another factor that should be considered is that the technology is moving closer to hitting mainstream adoption, this is causing banks to look at their involvement in these groups and perhaps consider whether independent partnerships are a more effective path to take.
R3 was founded in 2014 and started with 42 original members. The group last month revealed that it would open source the code for the distributed ledger called Corda, which was created in collaboration with the Hyperledger Project.