Nine major investment banks including J.P. Morgan Chase and Goldman Sachs have partnered with distributed ledger startup R3CEV.
The partnership will see collaborative efforts between the institutions take shape, work that will include the development of standards for using blockchain technology within the broader financial industry.
The banking group includes Credit Suisse, State Street, UBS, Commonwealth Bank of Australia, BBVA, Barclays and Royal Bank of Scotland. Many on the list have previously announced independent efforts to study blockchain tech, and the banks are said to be investing money in R3 as part of the effort, according to a report by The Financial Times.
The banks and R3 will form working groups as part of the development of blockchain prototypes and proofs-of-concept. R3 has spent months working with Wall Street financial institutions on the technology, a process that included hosting industry roundtables and assisting on internal investigations by banks.
R3 CEO David Rutter said of the partnership:
"This partnership signals a significant commitment by the banks to collaboratively evaluate and apply this emerging technology to the global financial system. Our bank partners recognize the promise of distributed ledger technologies and their potential to transform financial market technology platforms where standards must be secure, scalable and adaptable."
Representatives from the banks involved said the partnership helps harmonize development of the technology in a bid to promote more comprehensive work.
"Right now, you're seeing significant money and time being spent on exploration of these technologies in a fractured way that lacks the strategic, coordinated vision so critical to timely success. The R3 model is changing the game," said Kevin Hanley, director of design at Royal Bank of Scotland.
Participation by the banks, according to one representative, is reflective of the growing interest among large financial institutions in blockchain tech.
"These new technologies could transform how financial transactions are recorded, reconciled and reported - all with additional security, lower error rates and significant cost reductions," said Hu Liang, State Street SVP and head of emerging technologies.
Bank image via Shutterstock