American Express is elbowing its way into the crowded blockchain party.
The biggest credit card issuer by purchases has signed on to the Hyperledger Project, an industry group of more than 100 members developing blockchain technology for corporate use. The digital ledger known for underpinning bitcoin has potential to reshape the global financial system and other industries.
American Express will contribute code and engineers to Hyperledger, which was started by the Linux Foundation in 2015 and now counts companies like International Business Machines, Airbus Group and JPMorgan Chase as members. Many banks had previously joined a consortium called R3 CEV to explore ways to speed financial transactions using blockchain, but that group has lost members and is already a member of Hyperledger.
"We want to get closer to blockchain technology and further imagine its possibilities and use cases," Sastry Durvasula, senior vice president of technology at American Express, said in an interview.
American Express, while experimenting with various applications of the technology across its businesses, had yet to join an industry group. In 2015, its American Express Ventures
New York-based American Express sees blockchain as a "game-changing" technology in banking, particularly digital payments. It could even be as important for companies as Big Data, the use of analytics tools to sift through large volumes of information to find patterns, Durvasula said.
Global banks are scrambling to find ways to use the blockchain as a decentralized ledger to transfer money, track contracts and clear complex financial transactions. To banks, the blockchain also has an intriguing security feature: Entries can't be erased or modified unless the parties agree to the changes. But regulatory hurdles and changes required to complex corporate processes have so far slowed its adoption.
Still, commercial deployments using Hyperledger's code could begin this year, according to Brian Behlendorf, executive director of Hyperledger.
"We have the history and heritage of reinventing ourselves, and we are betting big on the blockchain," Durvasula said.
