Despite their harsh exterior, banks have been quietly getting ready for a world that involves cryptocurrencies.
Bank of America has most recently secured a patent for a cryptocurrency aggregation system, one in which massive companies store customers’ crypto deposits in an enterprise account involving vaults and offline storage instead of taking on the risk themselves. For instance, “deposit accounts at an enterprise, like a financial institution, are utilized by customers of the financial institution to deposit funds for safekeeping,” consistent with the patent.
While several of the dozens of patents filed by banks so far have centered on blockchain technology, this technique, that received the green light on November. 13 by the U.S. Patent and Trademark office, is clearly a competitive move in crypto.
Bank of America’s system is comprised of a memory to store client and enterprise accounts also as a processor to handle cryptocurrency deposits across coins like “Bitcoin, Litecoin, [XRP], Peercoin, or Dogecoin” and identify public keys, matching keys with the relevant customer and determining the worth of deposits. The processor also harnesses the public key of the business and aggregates the crypto in an enterprise account.
Source: U.S. Patent and Trademark Office
The patent application, that was filed in 2014, acknowledges that crypto transactions are on the rise, saying “financial transactions involving cryptocurrency have become a lot of common.” in the meantime, the number of merchants accepting cryptocurrencies is growing every day, with companies like square having recently secured a patent for taking crypto payments.
An enterprise crypto storage system from the likes of Bank of America may spur further adoption and encourage businesses and consumers alike to transact in crypto. However it might also turn off several in the crypto community amid an usually contentious relationship that exists between the two worlds, especially if the bank begins tacking on fees and extra prices that the peer-to-peer system is intended to avoid.
Nonetheless, Bank of America describes a system that's efficient, one that's designed to bypass fees that are related to changing cryptocurrencies. For example, in one of multiple “embodiments” of the technology described in the patent, Bank of America suggests its system “negates the necessity for customers of the enterprise to use a third-party currency exchange to execute a desired currency exchange.”
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They describe taking similar steps with crypto as banks do with fiat by “securely storing the customer’s cryptocurrency funds,” which might offer the enterprise the ability to use the crypto stored in these accounts to “to conduct transactions on the behalf of those customers which will want to utilize such cryptocurrency and debit or credit the particular customer accounts as appropriate.”
Meanwhile, Michael Wuehler, one among the inventors whose name seems on several of the company’s blockchain patents though is missing from this one, recently suggested that the patents are “meaningless” and are designed to skew the public perception of the bank on innovation.
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Details of Crypto Deposits in Bank of America
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