Both institutions have quit membership of the R3 group and will not be investing in its latest reported funding round.
Santander did not comment on its decision to depart R3, however, it's understood it will focus on other blockchain projects and that its involvement with other groups, including Digital Asset Holdings (DAH) and Ripple, will continue.
DAH's founder Blythe Masters earlier this year was appointed as an adviser on the technology at the bank, which is also an investor in her company.
Santander is one of several financial institutions to back Ripple, which in September raised a further $55m in series B funding, taking its total raised to $93m.
Goldman Sachs is also a backer of DAH. The bank could not be reached for comment at the time of publication, but told the Wall Street Journal it would continue to work with the technology.
"I think some investors dropping out is expected as the consortium matures. Its a very large group of banks and if 90 per cent of the first round investors are staying in for the second round, considering the track record of market utilities, that's not a bad outcome at for R3 at all," said Ajit Tripathi, a director at PwC's blockchain practice, adding that these collaborative groups are just one of the ways banks can gain a competitive edge in the market
R3 has more than 70 members including banks, insurers and credit card companies. They are interested in the power of blockchain's distributed ledger technology to speed up transactions and reduce the costs of processing them.
The group is working on a smart contracts platform called Corda which was first publicly demonstrated with Barclays in London back in April.
According to Reuters, the firm has reduced its fundraising target to $150m, and Morgan Stanley and National Australia Bank will not participate in the round.
R3 could not be reached for comment at the time of publication.
Simon Taylor, co-founder of blockchain consultancy 11:FS and former head of blockchain at Barclays said: "I think you're seeing the ones that had already made other bets now back those more fully rather than hedging."