Rumours have circulated in the press that JP Morgan, BNY Mellon, Banco Santander, and technology giants such as Microsoft and Cisco, are all part of a new blockchain-based guild dubbed “Enterprise Ethereum”.

JP Morgan, BNY Mellon and Banco Santander refused to comment on reports that they are members of a soon-to-be-launched blockchain consortium that appears to include both existing and former stakeholders in R3, a similar syndicate which numerous big banks abandoned several months ago.

In November last year, Goldman Sachs, Morgan Stanley, Santander and the National Australia Bank all withdrew from the R3 consortium within the space of a week, this news service reported, a move that signalled the banks were focusing their interests in disruptive technologies elsewhere.

Since then, however, the banks have made little noise about their movements within the blockchain technology sector and not much is known about where their interests now lie.

Meanwhile, rumours have circulated in the press that JP Morgan, BNY Mellon, Banco Santander, and technology giants such as Microsoft and Cisco, are all part of a new blockchain-based guild dubbed “Enterprise Ethereum”.

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 it is only one of several hundred applications that use blockchain technology. The nascent 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. 

JP Morgan has reportedly already developed several projects based on Ethereum's codebase.

However, when contacted by this publication for comment on the matter, the Wall Street giant declined to comment, as did both Banco Santander and BNY Mellon.

The banks' interest in the new initiative could signal a shift of interest among financial institutions towards less renowned disruptive technology platforms, such as Ethereum, should speculation materialise. 

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.

This publication will continue to monitor financial institutions' interests in the Ethereum consortium and will update coverage accordingly.