by JP Buntinx
On September 21st, financial giant Bank of America announced that had filed a patent for a new wire transfer system based on blockchain technology back in March of 2015. The patent application in question was revealed to the public on September 17th of this year, along with details of how cryptocurrency technology could be the way forward for wiring money all over the world.
Bank of America’s patent application would, in theory, allow customer funds to be sent to a cryptocurrency exchange for conversion purposes. Once this step is completed, the funds would be transferred to a second exchange and only then converted into foreign currency. The final step of the process sees the foreign funds being transferred to a recipient.
There are multiple advantages to this new hybrid of wire transfers using blockchain technology. First and foremost, the traditional limitations of wire transfers would be bypassed completely ,and transfer reliability would be improved drastically. Secondly, there would be less need for centralized third-party service providers to complete the transaction. Last but not least, no customer information has to be shared with third-party players, which improves customer data protection.
What makes this patent truly interesting, however, is the fact that several virtual currencies are named as specific examples for this technology to be used. Bitcoin is obviously included, but there is also a mention of Litecoin, Dogecoin, and Ripple. By the look of things, Bank of America is not putting all of their eggs into the Bitcoin basket, as they keep an open mind toward popular alternative digital currencies.
Bank of America specifically mentions the usage of multiple cryptocurrency exchanges to complete the wire transfer process, depending on favorable pricing at the time of transaction. The patent references multiple exchange platforms, including (but not limited to) Bitstamp, OKCoin, BTCC and Cryptsy.
Making matters more cost-effective is part of the reason why blockchain technology and digital currencies are a logical choice for wire transfer improvements. Buying and selling digital currency across multiple exchanges can be done instantaneously with very little to no cost involved in the process. At the time of publication, there was no official indication as to whether or not these savings will be passed on to customers. Furthermore, a proper security framework will need to be put in place to handle the transfer of funds.