What began as a conversation a couple of years back in an office in Palo Alto is now a 60-plus consortium of blockchain-obsessive banks: the R3CEV technology innovation group.
Amassing a bunch of companies that are in intense competition with one another, and which are also some of the most highly regulated entities on the planet, brings its own set of interesting problems.
Talking at the Global Blockchain Summit in Shanghai, R3's head of market research Tim Swanson focused on regulatory and compliance issues which have become close to the technology group's heart.
One of the things to consider is when you are encrypting data and adding it to shared ledgers is you are actually allowing third parties to have access to that data, said Swanson.
"Even if they can't read it there is a potential that later on - 20 years from now – if that encryption has any kind of vulnerability, or it can be attacked and someone can unscramble the information, then you could be fined.
"Whether there is a statute of limitations is another conversation. The bottom line is, there is trade-offs for any solution."
Swanson touched on instances of data sharing legality and potential solutions such as sovereign clouds. "The idea here is effectively you build a physical site that allows you to be physically separated. There are moats; I believe Visa has a moat."
He mentioned BNY Mellon NEXEN, a private cloud for collaboration, while recently DBS Bank said it was talking to Amazon about moving 50% of computing workload to a cloud.
Taking this into consideration, there should be plenty of opportunity in reg tech and third parties to automate compliance requirements, noted Swanson.
Anything that relies on third parties or goes outside the parameter of the financial institution is a challenge for us and our members, he added. "You still have to rely on these organisations to manage uptime and handle maintenance. There is still no public information on a blueprint for that.
"Another issue is if you are using one or two cloud providers, how do you prevent a database administrator who could unilaterally try and change a block. We don't want to have this one party be able to use that right."
Another challenge is how to settle disputes that span multiple jurisdictions, and how to handle something like a bankruptcy , or a default, or if a trade doesn't go through.
Swanson added: "Moving financial assets means some of the most heavily regulated instruments in the world. If they don't fulfil compliance demands they get fined and no financial institution wants to be fined for something like that – they don't want to be fined at all."
Santander's head of blockchain labs, John Whelan, spoke about the banking DLT consortia phenomena with some authority. "We are members of a few of them," he said. "These consortia get together to do a certain thing. They can be formal or informal, there can be a legal agreement."
Whelan spoke about the Utility Settlement Coin to tokenise central bank money which involves UBS, ICAP and BNY Mellon with technology from UK-based Clearmatics.
He listed a number of use cases that might be addressed by a consortium approach including, privacy, blockchain identity, private key management life cycle, reversibility of transactions and tokenisation of assets.
He said there are quite a few consortia out there that are not public. The way they might be formed is typically first via an NDA and perhaps a group of banks in a certain territory will come together and put in a little bit of capital ($50,000, for example) to produce a proof of concept.
"It's a flexible way to get somewhere fast. If you are thinking about getting in a consortium, start small and maybe go and partner with another bank down the street.
"China has an opportunity here to build robust consortia looking at different problems."