Talks over the stake sale are in initial stages and R3 is contemplating to own a stake in the company and operate it for 10 years, a source close to the developments told Financial News.
Launched in September 2015, R3 is aimed at developing and testing the blockchain technology for financial services companies. Its members include Goldman Sachs, BNY Mellon, UBS, JP Morgan and Deutsche Bank, among others.
The project will also seek to establish consistent standards and protocols in order to facilitate broader adoption of the technology.
Headed by David Rutter, the consortium has already successfully conducted the testing of distributed-ledger technology.
Any commercial product developed by R3 will not be owned by the new entity and its investors, as R3’s development lab would not be part of it.
There is growing competition among Blockchain startups to raise funds or obtain deals from big financial institutions to conduct pilot projects.
In February, New York-based startup Digital Asset Holdings (DAH) got funding of $60m from 15 investors, including Deutsche Börse, Icap, the Depository Trust and Clearing Corporation, and Goldman Sachs.
Similarly, London-based SETL is also looking to raise strategic funding for the distributed ledger technology.
Last month, Microsoft has formed a partnership with R3 to speed up adoption of blockchain technology in the financial industry.
Under the deal, Microsoft will provide cloud-based tools, services and infrastructure for R3 lab locations around the world, as well as dedicated technical architects, project managers, lab assistants and support services.
R3 also selected Microsoft Azure as the preferred cloud services provider for its R3 Lab and Research Center which provides services to more than 40 member banks.
Blockchains, which are online ledgers to record transactions, have gained prominence following the growing popularity for the digital currency bitcoin.
Distributed ledger technology is expected to help in completing financial transactions with greater speed, security, cost-efficiency and transparency compared to the existing system.
Image: R3 looks to raise $200m to fund blockchain technology projects. Photo courtesy of hin255/FreeDigitalPhotos.net
