The Hyperledger Project, a collaborative cross-industry effort led by The Linux Foundation to create an enterprise-grade, open-source distributed ledger technology, announced that American Express has joined the project as a Premier Member. The global financial services giant joins more than 100 members across the technology, finance, banking, Internet of Things, supply chain and manufacturing industries.
Launched in December 2015, the Hyperledger Project is a collaborative cross-industry effort aimed at advancing blockchain technology by creating an open standard for "a new generation of transactional applications."
"It's always encouraging to see large, global organizations like American Express join Hyperledger," said Brian Behlendorf, the executive director of Hyperledger. "As the project continues to grow and take shape, I believe support from leading organizations and their expertise will drive successful pilots of Hyperledger blockchain technology into production later this year. The aim is to then begin to repeatedly build new systems for this emerging industry and its various use cases and applications."
American Express will be represented on the Hyperledger Governing Board by Senior Vice President of Technology Sastry Durvasula, who is responsible for leading enterprise-wide big data, blockchain technology, digital payments and partnerships. "We want to get closer to blockchain technology and further imagine its possibilities and use cases," stated Durvasula in an interview, as reported by Bloomberg Markets . "We have the history and heritage of reinventing ourselves, and we are betting big on the blockchain."
Durvasula added that American Express sees blockchain technology as a game-changer for banking and in particular for digital payments, with an importance comparable to big data technology.
"We're excited to join Hyperledger, as we're looking to take full advantage of blockchain to deliver new and innovative products for our customers and partners, while transforming existing business processes and applications," said Marc Gordon, executive vice president and chief information officer of American Express. "As a Premier member of the project, we're expecting our expertise and global reach to help advance this open source blockchain ecosystem."
The Hyperledger press release doesn't go into details about what exactly the credit card giant wants to do with blockchain technology, and the company itself hasn't disclosed more information so far. Some indications could be found in previous moves and statements from American Express.
In a 2014 talk covered by the New York Times , American Express CEO Kenneth I. Chenault said that "the protocol of Bitcoin is going to be important," comparing it to the P2P services that have driven disruptive change in the music industry. At the same time, Chenault cautioned against considering blockchain technology as ready to take over payments, and emphasized that credit cards still offer important advantages that meet consumer needs, such as the ability to defer payments.
"[The] work that Amex does, while it could be supported by distributed ledger, goes far beyond peer-to-peer. It involves creating a set of guarantees and a set of services for both consumers and merchants that they wouldn't get if they were just trying to transact with one another," said Neal Sample, president of Enterprise Growth at American Express, as reported by Bitcoin Magazine in 2015. According to Sample, payment is just one of many stages in the commerce cycles, and companies such as American Express provide a complete infrastructure for consumer protection. While bitcoin transactions are intrinsically irreversible, with no consumer protection against fraud, American Express will actively help its customers.
In 2015, American Express invested in Abra, a blockchain company that wants to take a slice of the $550 billion global remittance market. Combining an Uber-like peer-to-peer network with smartphone technology and the blockchain, Abra wants to be " the Uber of digital cash ."
"As people and businesses transact more globally, there's a need for more convenient and affordable ways to move money, and we think the blockchain could play an important role in the evolution of money transfer and commerce, especially in emerging markets," said Harshul Sanghi, American Express Ventures managing partner, in a statement reported by Forbes.
Perhaps these precedents could provide insight about American Express's blockchain plans. To find out more, Distributed reached out to Hyperledger and American Express.
"Global payments networks were the first place where the power of blockchain technology became evident. With American Express joining Hyperledger, it brings its tremendous expertise in this area to the community. We are excited about the additional talent and use cases and implementation experiences that their involvement will bring," said Hyperledger Executive Director Brian Behlendorf.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
