He said USAA had a large team researching the potential of the blockchain, an open ledger of a digital currency’s transactions, viewed as Bitcoin’s main technological innovation. It lets users make payments anonymously, instantly, and without government regulation.
The blockchain ledger is accessible to all users of Bitcoin, a virtual currency created through a computer “mining” process that uses millions of calculations. Bitcoin has no ties to a central bank and is viewed as an alternative to paying for goods and services with credit cards.
“We have serious interest in the blockchain and we think the technology would have an impact on the organisation,” said Marquez. “The fact that we have such a large group of people working on this shows how serious we are about the potential of this technology.”
USAA, which provides banking, insurance and other products to 10.7 million current or former members of the military, owns and manages assets of about $213 billion.
Marquez said USAA had no plans to dabble in the Bitcoin as a currency. Its foray into the blockchain reflects a trend among banking institutions trying to integrate Bitcoin technology into their systems. BNY Mellon and UBS have announced initiatives to explore the blockchain technology.
Most large banks are testing the blockchain internally, said David Johnston, managing director at Dapps Venture Fund in San Antonio, Texas. “All of the banks are going through that process of trying to understand how this technology is going to evolve.”
“I would say that by the end of the year, most will have solidified a blockchain technology strategy, how the bank is going to implement and how it will move the technology forward.”
USAA is still in early stages of its research and has yet to identify how it will implement the technology.
In January this year, USAA invested in Coinbase, the biggest Bitcoin company, which runs a host of services, including an exchange and a wallet, which is how Bitcoins are stored by users online.