Not minding the unfriendly cryptocurrency statements made by banks, they have been anticipating the takeover of cryptocurrency as the world’s official medium of exchange, preparing for the inevitability that involves a world using digital currency in the nearest future. Notably, last year, CEO of JP Morgan Jamie Dimon called Bitcoin (BTC) a fraud and it consequently led to a drop in the price of Bitcoin for a while.
However, Bitcoin later picked up in value again, leading to an all-time high to over five times the price Bitcoin was before the statement made by the CEO. If the opinion of the CEO of the American multinational investment bank and financial services company couldn’t have a lasting effect on the cryptocurrency world, then what can? Later, JP Morgan admitted that cryptocurrency was a real threat to the bank, just months shy of the ten-year-old Bitcoin mark.
Bank of America Secures Patent for Cryptocurrency Deposits
The crypto world recently scored another point as the Bank of America secured a patent for a cryptocurrency aggregation system. This will lead to storage of customers’ crypto deposits by big companies in an enterprise account involving vaults and offline storage rather than taking on the risk themselves. According to the patent, “deposit accounts at an enterprise, such as a financial institution, are used by customers of the financial institution to deposit funds for safekeeping.”
Several of the patents filed by banks on crypto is focused on the blockchain technology. This move made by the Bank of America, however, is a competitive move in crypto. The U.S. Patent and Trademark Office gave the system the go-ahead on 13th of November. Bank of America’s system consists of a memory to store customer and enterprise accounts and a processor to handle crypto deposits across coins like Bitcoin, Litecoin, Ripple, Peercoin or Dogecoin and also to allow identification of public keys, in line with the relevant customer and determining the value of deposits. The processor also harnesses the public key of the business and aggregates the crypto in an enterprise account.
The application for the patent was filed as far back as 2014, and it recognized the fact that transactions made in crypto were steadily increasing saying, “financial transactions involving cryptocurrency have become more common.” Several merchants now accept cryptocurrencies as payment methods, and more are adopting crypto as a payment method by the day. The company, Square have also recently secured a patent for accepting crypto as a payment method.
Potential Clash with the Cryptocurrency World
This move by the Bank of America will further increase the mass adoption of cryptocurrency and encourage businesses and customers to engage in the crypto world. Adversely, some already in the crypto world could be turned off as traditional banker sand cryptocurrency enthusiast have always been at loggerheads. If the banks begin to levy fees and costs on the blockchain, it could further cause a problem between the two worlds as crypto works based on a peer to peer system that abhors these fees.
Bank of America has, however, explained that its system is efficient and is designed to bypass fees associated with the conversion of cryptocurrencies. For example, in one of multiple “embodiments” of the technology described in the patent, Bank of America suggests its system “negates the need for customers of the enterprise to use a third-party currency exchange to execute a desired currency exchange.”
They described security of users’ crypto funds treated just the same way as fiat deposits are treated and would give the enterprise the ability to use the stored digital assets to conduct transactions on behalf of the customers that may want to utilize such cryptocurrency and debit or credit the particular customer accounts as appropriate.
Michael Wuehler, an inventor whose name appears on several of the company’s blockchain patents but didn’t appear in this recent one, suggested that the patents are ‘meaningless’ and are designed to tilt the public’s view of the bank on innovation.