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Poste Italiane Joins FedEx in Adopting Hyperledger Blockchain

Poste Italiane Joins FedEx in Adopting Hyperledger Blockchain

The Italian Postal Service has now joined multinational courier delivery services FedEx in adopting the Hyperledger blockchain.

Poste Italiane is now to use Hyperledger as part of its Deliver 2022 Business Plan in order to streamline its current mail services. Hyperledger is a collaborative project led by the Linux Foundation to create open-source standards for blockchain and Distributed Ledger Technology (DLT). It includes American Express, Cisco, Intel , JPMorgan, Deloitte, and Huawei.

FedEx came on board with Hyperledger in September 2018 with the company impressed that the tech had “big, big implications” for supply chains, transportation, and logistics, all areas crucial to the US postal giant’s worldwide operations.

A statement from Poste Italiane said that blockchain tech is “an effective response to the problems of security, transparency, interoperability, and privacy”. It follows a recent positive amendment to current Italian Senate definitions. Definitions have now been offered for DLT technologies and smart contracts, also that blockchain-based digital data will now represent a legal validation of content.

Once the amendment becomes Italian law, the technical aspects will be overseen by the Agency for Digital Italy and the Presidency of the Council of Ministers.

After signing a declaration with six other EU states this month to integrate blockchain into European economies, the Italian Government has also taken a bold step further by manning its new blockchain advisory board with 30 experts.

The board has been in the pipeline since September 2018 when the Ministry of Economic Development called for more government focus to “know, deepen and address the issue of distributed ledger technologies (DLT) and blockchain”, as well as increase public and private investments in this direction.


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Ripple: Overvalued, Centralized, or the Next Bitcoin?

Ripple_ Overvalued, Centralized, or the Next Bitcoin_

Ripple has, in some form, been around longer than Bitcoin. Yes, it shares a certain peer-to-peer ambition with Bitcoin, but there is no denying that it leans towards centralization and favors big banks in a way that Bitcoin simply does not.

Now central banks and even American Express are getting involved with Ripple, what is it that makes this blockchain payment system so much more appealing to the mainstream financial system, and is its growing popularity sustainable?

The changing technology

Ripple’s first payment system ‘RipplePay’ dates back to a pre-Bitcoin era, launched in 2004 and lasting until 2012. The original payment architecture was based on a peer-to-peer network that allowed individuals to loan to each other, with payments acting as updates to loan balances. Payments required a path of trusted relationships between payer and recipients, which acted as IOUs being passed along the chain.

This original model was critiqued as leaving the system exposed to centralization around several large banks because of the difficulties in authenticating the trust networks as reliable.

When Bitcoin started gaining traction in 2011, much of Ripple’s target demographic shifted towards Bitcoin because of the cryptocurrency’s superior architecture. Both payment networks share a similar ideology, and there has been an overlap between the two even in terms of developers. Early Bitcoin pioneer Jed McCaleb joined Ripple in May 2011, with the technology changing significantly in just a few years after his arrival, although he left the company sometime between 2013 and 2014.

Ripple’s native token XRP was released in January 2013, operating on a public chain of cryptographic signatures as does Bitcoin, meaning the original web of trust was able to be dropped.

Why some claim Ripple is centralized

Ripple is marketed as a decentralized payment system, but the actual consensus protocol has been shown to show something quite different. Researchers from leading exchange desk BitMEX conducted in-house testing of the technology, in which time they found that the company behind Ripple was ”essentially in complete control of moving the ledger forward”, leading them to dub the system centralized.

While the research team noted that there was nothing inherently wrong with centralized systems, saying that indeed they can be easier and more efficient to run, they noted that the actuality of the protocol was at odds with how it was being marketed. ”Some may consider [it] misleading,” they added.

Close ties with central banks

In recent months, Ripple has hit the headlines for its partnership with major banks, facilitating cross-border payments through Ripple-enabled gateways.

In December 2018, the central bank of the middle eastern nation of Kuwait became one such Ripple gateway client, using the network for blockchain-backed direct transfers to the neighboring country of Jordon. Ripple’s “fast remittance service” claims to be quicker and cheaper than the current services, available online 24 hours a day rather than operating with a standard bank’s 9 am to 5 pm service.

Even Bitcoin nemesis American Express has praised Ripple’s cross-border payment system, saying the blockchain system has the potential to revolutionize international payments. It has tested Ripple payments for use by American Express clients and is reportedly leaning in favor of the system for its own blockchain exploration.

Some see Ripple’s close relationships with central banks as a positive indicator for the cryptocurrency market and wider adoption, while critics suggest it is just another indicator of the network’s vulnerability to centralization. Already failing the censorship resistance that Bitcoin boasts, some have suggested it fails to offer any particularly substantial technological innovation also.

Overvalued by billions of dollars?

Ripple has surpassed Ethereum in terms of market cap, taking place as the second largest cryptocurrency by volume. However, a recent report by cryptocurrency analytics firm, Messari, suggests that market capitalization of XRP may be overvalued by around USD 6 billion. The prognosis is based on data retrieved from both cryptocurrency exchanges and third-party cryptocurrency data services in a review of XRP’s ”health and legitimacy”.

Messari suggests there could potentially be an enormous 48% overvaluation of the cryptocurrency’s liquid circulating supply, with the disparity created in large part by ”significant sell-side pressure in the XRP market”. Other discrepancies the research body considered include questions as to whether the XRP 5.9 billion foundation contribution that was made by CEO Chris Larson and XRP 2.5 billion held by RippleWorks are included in the market cap, both of which are technically illiquid assets. Other queries were raised over Ripple assets that face selling restrictions.

Without full disclosure from Ripple, Mesari acknowledges its figures are only estimates. At the time of press, Ripple has yet to disclose its own methodology for calculating the trading volume of XRP.

XRP sales are falling

Ripple’s Q4 2018 report published 24 January 2019 shows that token sales are falling; Q3 boasted sales of USD 163 million, falling to USD 129 million in Q4. Sales in Q4 represent just 0.16% of Ripple’s trading volume.

While the cryptocurrency market as a whole remained in a bear market during this period, it is perhaps unsurprising to see sales fall. Nonetheless, Ripple benefited from growing support from central banks and governments during this period, which should have been an opportunity for XRP to prove its individual strength in a bad environment.

If Ripple’s top strength of receiving support from the mainstream is not enough to convince investors, that is not great news for XRP moving forward, particularly if the cryptocurrency market continues to perform poorly.

Q4 2018 also saw XRP’s volatility decrease in the market, as did BTC at that time. Its daily returns volatility was 5%, marking the lowest quarterly average since Q4 2016.

Many questions remain

Ripple has been adopted by a number of banks and payment networks and is recognized as a secure settlement infrastructure technology, praised for its efficiency.

But there are certain points where the project lacks total transparency.

For one, it is not as decentralized as marketing would imply, and there are a lot of questions remaining over what is exactly going on with XRP’s market cap calculations and restricted assets.

It is no Bitcoin, but it would seem to have found its comfortable place alongside mainstream finance, coming as close a blockchain payment network has got so far. Whether that will be enough for XRP to continue succeeding in the cryptocurrency market is questionable.


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American Express Praises Ripple for Cross Border Payments

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According to a top American Express representative, Ripple has the potential to revolutionize cross-border transactions globally.

Speaking in Madrid recently at the Wings of Change Europe conference, Carlos Carriedo, the credit card giant’s general manager of corporate payments indicated this was one reason that blockchain integration was high on the company’s agenda for change.

Clearly, Ripple’s XRP has caught the eye as the preferred blockchain route for the company moving forward, if Carriedo’s views are a clear representation of the Amercian Express’ programme for future development of financial services around the globe. He explained why his company was looking at Ripple becoming a significant blockchain partner in the future:

“Blockchain is absolutely an option we’re looking at. Just to give you a sense, we have invested in a fintech lab based on blockchain technology, just to understand how to leverage this better…We did a test, partnering with Santander locally, and with Ripple to just do cross-border transactions…And in a matter of seconds, through this test, our clients were able to transfer funds in a very transparent and seamless way, from one part of the world to the other one.”

Ripple itself has just joined three other partners to form a European blockchain called “Blockchain for Europe” in order to bring together what it describes as “fragmented” voices in Europe into a “more unified whole” in matters of the blockchain. Such moves are sure to offer confidence to intuitional players such as American Express, in the fact that Ripple is becoming a far more representative voice for the blockchain industry as a whole, despite its Bitcoin purist detractors.

Ripple is spreading its global network. And by working with American Express, collaborating with Santander to reduce the current inefficiencies of cross-border payments it has heightened its global profile. Also, significantly Ripple has gained approval to operate in China, opening up other opportunities in the region.  By using Ripple, Santander has stated that it wants to fundamentally change cross-border payments universally by establishing a strong alliance between the two companies. AM’s Carriedo again, speaking of the future of payments:

“There is more to come. There’s still a lot of things that need to get addressed with blockchain as a technology. But it’s very promising…The future is definitely digital. Digital is the way payments will continue to be across both the consumer part of the business the commercial part of the business”.

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Mastercard Considers Blockchain for Point-to-Point Payments

Credit card giant Mastercard is lining up for blockchain as it files patents to improve the tracking of consumer payments.

The company has expressed that “point-to-point” transactions could be registered efficiently as they are processed using DLT. In line with this patent, other filings remain ongoing. The US Patent and Trademark Office has an outstanding application filed last year entitled ‘Method and system for recording point to point transaction processing’.

Mastercard has made a very clear distinction between blockchain technologies, however, labeling the latter as “junk” in previous comments. In a recent comment, Mastercard stated:

The use of digital ledgers, such as blockchains, may further facilitate the services provided by such a platform, by enabling data to be stored clearly and in a format that is easily auditable by participating entities. In cases where ledgers like blockchains are used, the leaders may be provided even more benefits as they may be immutable and resistant to tampering, which may further increase the reliability of such data.”

Back in 2016, Mastercard released some preliminary APIs: Blockchain Core API, Smart Contracts API and Fast Pay Network API. The implementation of blockchain technology is set to change the way in which consumers pay for goods and services. Mastercard, like Santander with its blockchain phone app, will be working alongside San Fransisco-based technology firm Ripple to realize its blockchain future.

Another significant patent filed by Mastercard which came to light only recently shows the company’s intent to pursue the viability of blockchain technology. Titled ‘Method And System For Payment Card Verification Via Blockchain’, the patent described a fully functional system that could replace physical credit cards. The patent was originally filed in December 2016 but only became visible to the public earlier this year in June.

American Express also has no intention of being left behind in the blockchain race as these patents wait for approval, continuing to look at ways of incorporating the new technology into its own business model. It has a current patent awaiting approval for offering customer-specific types of rewards including points, a virtual currency, or specific items tied to a product.


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American Express Latest Blockchain Patent Application to Provide Payment Evidence

An application released last week by the US Patent and Trademark Office shows that multinational financial services corporation American Express (AmEx) is seeking to patent a blockchain payment system.

Patent details

The application details a blockchain-based system to aid financial transactions, specifically in terms of confirming transaction totals and merchant identities. It would also encrypt the proof-of-payment details using the blockchain’s public key, maintaining this on a first blockchain node.

This encrypted data would then be propagated to a second blockchain node which would allow a smart device to decrypt this, sharing the information with a secondary smart device and triggering the correct payment to take place.

The concept was developed with the objective of providing a stronger quality of payment evidence for merchants and customers that goes beyond what is offered on a standard receipt. This blockchain solution would have the potential to offer an extended look into the details of each transaction, covering such elements as contract and transaction data.

Patent applications

AmEx has offered a variety of applications for its proof-of-payment concept. This includes circumstances from standard payment operations to customers being able to use the card they made their purchase with to do such things as unlocking a hotel room by retrieving the proof of payment on the blockchain.

While no decision has been made as of yet in regards to hosting the service on a public or private blockchain, the application notes the benefits of a public network’s cumulative computing power in improving security.

AmEx’s blockchain ventures

Earlier this year, AmEx announced it would begin trials for a membership rewards program, utilizing blockchain standardization technology Hyperledger whom they partnered with last January. The open-source project allows a variety of companies to contribute software code, with IBM already participating in this.

Blockchain has been acknowledged by AmEx as still in its early stages of adoption, but it also recognizes it as a rapidly growing industry that it clearly sees as crucial to be a part of.


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Amex Looks to Blockchain for Customer, Merchant Security

Multinational financial services corporation American Express is exploring the potential of a blockchain solution to increase customer and merchant security.

Vice president of technology at American Express, Tereasa Kastel, spoke at the Oktane 18 conference in Las Vegas earlier this week, discussing the multiple uses for blockchain being explored by the corporation.

Protecting identities and information

As reported by TechRadar, identification security and protecting user information formed the basis of Kastel’s speech. She discussed the prospect of an immutable blockchain solution to American Express’s objective of providing the highest levels of user security and data protection.

“If you’re in this industry, you have to have a voracious appetite for all things identity… to be able to work in a world where there is constant change, you… have to always ensure you can stay ahead of the curve,” she noted.

“Being in the financial industry, we have to be somewhat conservative on what legal and regulatory requirements there are,”‘ she added, commenting on the disparity between government policy, or lack of, regarding blockchain.

Despite this, Kastel said: ”On the other hand, what empowers an individual user to do in terms of controlling their identity, and have that identity be immutable, is something you can’t pass by.”

A blockchain identity wallet

Kastel outlined that initial blockchain probes would be limited to financial transactions. Now, however, she reported American Express is looking into creating a blockchain identity wallet.

”We were starting to explore what would an identity wallet look like, and could blockchain be used to help serve as, both internal, but also external card members and merchants,” Kastel said, detailing a visit to the corporation’s research and development lab.

She added that “American Express is a very innovative company”, in an acknowledgement of blockchain as the next seminal development in the technology industry.

Hyperledger blockchain technology

While Kastel’s talk was predominantly focused on the significant role of blockchain in American Express’s future service development, it coincided with the announcement of the corporation’s utilization of hyperledger blockchain technology.

This is being offered to merchants as an opportunity to create tailormade rewards programmes for individual American Express cardholders.


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