Numerous banking behemoths have joined forces with technology giants, including Microsoft and Intel, on a consortium that seeks to develop the Ethereum blockchain model so it can be used to streamline certain aspects of their business.

A raft of banking giants, including JP Morgan, UBS and Credit Suisse, and more than two dozen other companies have formed a new blockchain consortium in the latest push by financial services firms to make use of the nascent technology. 

Earlier this month, this publication reported that JP Morgan, BNY Mellon and Banco Santander were rumoured to be members of the Enterprise Ethereum Alliance, which appears to include both existing and former stakeholders in R3 - a similar syndicate that numerous big banks abandoned several months ago. 

Blockchain technology, a virtual distributed ledger of transactions shared peer-to-peer, can record ownership across a public network of computers rendered tamper-proof by advanced cryptography. It is already known as the platform for the controversial digital currency bitcoin, even though this is only one of several hundred applications that use blockchain technology. 

The technology is causing a stir within the financial services sector as its supporters believe it could reduce hidden expenses in the financial system by ousting inefficiencies across areas such as payments, syndicated loans and equity clearing.

Ethereum, founded in 2013 by cryptocurrency researcher Vitalik Buterin, is a blockchain-based software platform that allows developers to build decentralised applications. While the bitcoin blockchain is used to track ownership of digital currency, the Ethereum blockchain focuses on running the programming codes of decentralised applications.

The Enterprise Ethereum Alliance will work to enhance the privacy, security and scalability of the Ethereum blockchain with the goal of making it better suited to business applications, according to media reports, which cite the founding companies as sources.

Members of the 30-strong syndicate also include Accenture, BP, Thomson Reuters, Microsoft and Intel. 

The new consortium comes as banks and companies worldwide continue to spark alliances focusing on developing blockchain-based technology with the aim of streamlining certain aspects of their businesses.

The Enterprise Ethereum Alliance underlines the enthusiasm for the emerging technology and signals a shift of interest among financial institutions towards less renowned disruptive technology platforms. 

Unlike some other collaborative efforts, such as R3, members do not yet need to pay a fee to participate. 

Last year, R3's first round of funding flopped when the group's fee-paying membership of more than 70 began to shrink, and as a result, the group lowered the initial amount it aimed to raise from $200 million to $150 million.

A source close to the process at Goldman Sachs last year told this publication the group quickly became “saturated” as new members came pouring in, which resulted in a lack of headway being made and the project's prospects eventually becoming “unrealistic”. The bank baulked at being asked to contribute to funding alongside a plethora of other investors and subsequently explored other blockchain models, this publication understood.

Banco Santander, the Spanish lender, also dropped out for similar reasons, as the firm was testing “more relevant and more attractive” blockchain technology projects and proposals, including internal models, a source close to the matter last November told this publication.

R3 currently has around 70 members, according to media reports.