Whether they plan to open a cryptocurrency exchange or are just keeping their options open, the Bank of America has an ace up their sleeve.
America’s second-largest bank (with assets totaling $2.17 trillion) has been successful in its recent patent application for a “Cryptocurrency Transformation System.” View the full details of the patent here.
Through the cryptocurrency exchange that it has proposed, the BoA would own all rights to an automated platform which converts funds between digital currencies – based on data sources externally located from the bank.
Similar to other crypto exchanges, the one in question would have three parts.
The customer would deposit funds into the first part, which is Ipsum factum the customer account through which each client can manage all of his or her resources and chosen cryptocurrencies.
The remaining two accounts are owned and managed by the exchange.
Both behave as “float” accounts, with one holding the cryptocurrency that is being sold by the customer, while the other contains the cryptocurrency that the customer is purchasing. The latter transfers the newly acquired funds into the customer account, from which the customer can then withdraw.
The new Bank of America system aims to establish its own rate of exchange using external sources. Eventually, it may have enough data of its own to determine rates independently. More details on this subject will be released as they become public.
Furthermore, the patent writers expressed that the exchange would not be available to individuals, but solely enterprise clients.
Securing the Proposed Exchange
When it comes to security, it has been thoroughly considered as well. Included in the document is a proposed method for tracking and isolating potentially illicit transactions.
The system would calculate a risk score for each transaction made, using all data available for that operation, including the amount of the cryptocurrency the client would like to buy or sell. According to the patent, the exchange would block any suspicious transactions.
The Bank of America is one of the first banks to openly endorse or at least acknowledge the future of bitcoin as a plausible currency and investment – albeit not without risk.
Additionally, it is not the first blockchain-related patent application that the bank has made. BoA filed an earlier patent application in March 2014, relating to a wire transfer system for the cryptocurrency.
Other large corporations who have had filed recent blockchain technology patents are Mastercard and Goldman Sachs. Mastercard has developed an instant blockchain payment system, which shows great promise for the future.
The Bank of America stands to gain a lot through this new patent, should they choose to use it. As of December 2017, their stock price (BAC) is $29, up 0.75%. On top of that, the price of bitcoin has settled around $15,500 after coming within smelling distance of $20,000 on the CoinBase Exchange on December 7, 2017.