The vast majority of Wall Street-affiliated institutions have been larger promoters of the technology behind cryptocurrency: “Blockchain without bitcoin” is now the new mantra.
Bank of America Remains Skeptical
However, November 2017 changed a few minds as temptation rose dramatically on the back of Bitcoin’s massive growth. Other cryptocurrencies including Ripple, Litecoin, and Ethereum, were also incurring quick gains and volume seldom seen for daily traded stocks on Wall Street. Big hitters like CBOE, CME and the Nasdaq surged towards the industry, and the rhetoric was broken. No more aversion to cryptocurrencies, it seemed.
Brian Moynihan, the CEO of the Bank of America (BoA), turned immediately to the topic of blockchain technology when asked for his sentiment on Bitcoin while attending the World Economic Forum gathering in Davos, Switzerland.
The chief executive told Yahoo Finance that BoA quite likely has more patents than any other competitor involved with blockchain technology.
“We believe in the idea of distributed ledgers, and smart contracts, and all the words you hear about that. We are developing stuff [but] it’s not new concepts.”
Moynihan went on to reveal BoA’s view of blockchain and its potential applications. “The Registry of Motor Vehicles is a distributed ledger,” he said. “We know who owns a car, we know who owns a house. The idea is that you can do it more electronically, and can do it across borders.”
For Moynihan, the issue of cryptocurrency is wholly separate to blockchain technology in many important ways. Referring to bitcoin, he said: “The question of an anonymous currency, that’s a policy question that people have to answer. But the idea of digital movement of money, and blockchain, we’re all for.”
A search at the patent office reveals that BoA does, indeed, boast 48 patents and applications that are blockchain-related. Google’s patent database also shows that BoA owns 39 patents containing the word “cryptocurrency,” 36 that contain the word “Bitcoin” and 27 that employ the term “blockchain” in the registration documents.
Published information reveals that their most recent blockchain-inspired patent centers on a blockchain alias, with the purpose of facilitating intrapersonal payments.
Blockchain: Plenty of Use Cases
While it does seem that BoA leads the pack with the number of patents, they are by no means alone in their fraternity. In the world of banking, being able to enable transactions via blockchain represents massive savings if a bank can get it right.
Two representatives of the St Louis Federal Reserve bank published a paper on this concept, with the following statement an extract thereof:
“In addition, Wells Fargo has received patented protection for an application stemming from June 2017. Published very recently, the patent centers on an blockchain platform for global trade finance. The patent papers describe “generating a blockchain-based letter of credit (BLC) relating to a contract for a trade transaction between a seller and a buyer.”
In 2016, Yahoo Finance reported that banks were scurrying to fill open positions for blockchain engineers. The exact depth of the sector’s interest and rollout remains to be seen, but numerous pilots have been lanced, and it seems inevitable that the technology will change banking forever.
While everyone may think of Ripple as a suitable alternative, their less visible but more persistent income stream seems to be developing blockchain technology exclusively for banks. Chain is another outfit blurring the lines between crypto and traditional banking. Outside of finance, Walmart has employed blockchain tech to track perishable shipments, and IBM has applied the tech within their business protocols.
Moynihan was less enthusiastic about the current volatile trading and “the speculative side” of cryptocurrencies, saying, “We can’t get in the middle of this. We don’t trade it, we don’t have anything to do with it, because that’s really up to people to make that decision, we’re not going to participate in it.”
While he was referring to bitcoin, he adamantly omitted using the name throughout the interview. That said, it seems Bank of America is keeping their options open on participating, just in case.