USAA Bank Studying Bitcoin Technology

Journalist:
May 10, 2015

USAA, the bank that mainly markets to US military members and their families, is looking into utilizing Bitcoin to their advantage, for the purpose of increased efficiency.

The managing director of the Texas-based bank’s corporate development, Alex Marquez, told Reuters this past week that the bank would be looking into utilizing the block chain for the purpose of decentralization of some of its operations. Presently USAA has a sizable team investigating uses of the block chain for their the 93-year-old bank. Marquez told Reuters:

We have serious interest in the block chain and we think the technology would have an impact on the organization. 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.

More “Block Chain Only”

Marquez did take the time to point out that the bank would not be taking any strides to utilize Bitcoin the currency, a distinction that many traditional financiers have been making and a move that some feel is similar to going swimming without ever dunking your head.

Also read: Wall Street Investment Firms Can’t Resist Bitcoin

USAA is not the first traditional bank to do such a thing, that is, validate the open ledger while ignore the cryptocurrency for which it was designed. Other banks have similar initiatives though perhaps smaller or even less serious in scale, such as UBS and BNY Mellon. At the same time, several major Wall Streeters have taken to viewing the volatility of Bitcoin as a great speculative investment tool, and more than one listing have entered the traditional markets, notably GBTC.

Continuation of USAA’s Bitcoin Interest

Back in January, USAA was one of the notable investors in Coinbase’s record-setting $75 million Series C funding round. As opposed to the current initiative at USAA, investing in Coinbase is similar to investing in the future of Bitcoin. Coinbase’s future is irrevocably tied to the future of Bitcoin, despite community grumblings of its customer service and hyperactive anti-money laundering practices.

Bitcoin overall is still relatively new to most people. For many in non-cryptocurrency circles, it is rarely discussed without a likewise discussion of Silk Road and libertarian politics entering the mix. Bitcoin the technology hasn’t even yet reached its first stable version, despite countless people using the technology in their daily lives.

Developers view a software’s maturity different than users, and certainly there are a lot of issues to be settled before “final” versions can see release. At present, there is a hot discussion amongst Bitcoin developers and community members about the maximum size of blocks, a question that everyone would like to see settled once and for all. Some feel that a dynamic algorithm could be the answer while many others believe that raising the block limit to 20 megabytes, as Gavin Andresen suggests, is a good failsafe which will give the development team ample time to find a permanent solution.

One thing that traditional firms taking Bitcoin seriously contributes to the situation is that everyday people will find it easier to take seriously, since they have no trouble taking the traditional banks seriously.

Tags: bank
P. H. Madore @bitillionaire

P. H. Madore has written for CCN since 2014. Please send breaking news tips or requests for investigation to bitillionaire+phm@gmail.com. He lives in Maine, USA. A single father of four young children, he does not discourage financial donations, provided they do not come with strings attached.