United Services Automobile Association (USAA) has partnered with Coinbase, a bitcoin wallet provider, to trial a feature that allows a limited group of USAA members to check their Coinbase balances on USAA.com and USAA’s mobile app.
USAA was founded in 1922 by a group of US Army officers that were unable to get auto insurance because they were deemed to be high-risk by traditional financial service providers. Today, USAA provides insurance, banking, investments, retirement products and advice to 11.2 million current and former members of the US military and their families.
Founded in June of 2012, Coinbase is a bitcoin wallet and platform where merchants and consumers can transact with bitcoin. The company is based in San Francisco, California. As per the company’s website, the company has 4,200,000 consumer wallet accounts currently. The company also boasts of a merchant base of 41,000 users. Coinbase has also collaborated with companies such as Braintree and Stripe for payments integration. Till now, Coinbase has raised $106M from the world’s leading investors.
"Our highly mobile member base is looking at new innovations," said Darrius Jones, Assistant Vice President of enterprise innovation for USAA, in an interview on Wednesday. "Our military members move quite a bit compared to other consumers. What better than being able to look at your various household account balances in a single place?"
Depending on the outcome of the pilot (which started on Monday and will run for around 90 days), the bank will come to a conclusion that whether it will allow its customers to exchange currency or transact in bitcoin. As of now, users can only view their bitcoin balances through their USAA online and mobile accounts.
The announcement of the partnership has come at a time when the price of bitcoin has increased 48% since October 4 to $465 after lolling around $200 for most of this year.
"There have been a lot of banks interested publicly in blockchain technology, but it's not clear what they mean by that," said Nick Tomaino, business development manager at Coinbase. "Most are talking about private blockchains versus bitcoin technology and none have shipped anything. This is a bank actually talking about bitcoin and is shipping something."
The bank also participated in Coinbase’s $75-million funding round which occurred in January which involved other investors such as DFJ, NYSE, Andreessen Horowitz, Union Square Ventures and Ribbit Capital.
As the space of blockchain technology is heating up, USAA is gearing up to take the charge by taking the right steps to be in the game. It has established itself as one of the more proactive US banks by accepting blockchain technology and coming out with something innovative by using this technology.
LTP has always mentioned USAA banks while writing about the banks’ interest in blockchain technology.
Here are some other banks that have either partnered with or expressed interest in exploring blockchain: JP Morgan, Citibank, Barclays, Credit Suisse, BBVA, Santander, Lloyds, BNP Paribas, Bank of America Merrill Lynch, HSBC, Deutsche Bank, RBS, Rabobank, ABN Amro Bank, ING Bank, Westpac, Commonwealth bank, ANZ Bank, DBS Bank, Societe Generale, Standard Chartered, LHV Bank, Fidor Bank, CBW Bank and Cross River Bank.