The world’s second largest bank has filed over 20 patent applications since 2014.
It looks like the world’s second largest bank, Bank of America, is preparing itself for a world dominated by cryptocurrencies. Since 2014, the bank has been filing for blockchain and cryptocurrency related patents, which has now totalled over 20 patent applications.
The US Patent and Trademark Office (USPTO) has finally granted the bank a patent on a digital currency exchange system that would enable a customer to easily switch between different currencies pegged on exchange rates based on external data feeds.
“Enterprises may handle a large number of financial transactions on a daily basis. As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to exchange currencies and cryptocurrencies,” the bank wrote in the document.
Interestingly, the patent says the system has a security mechanism that would also detect suspicious activity and alert enterprises to block the transaction, thereby mitigating the costs associated with tracing down illegal activity by preventing them in the first place.
“Additionally, in certain embodiments, the system is able to determine whether the cryptocurrency transaction is suspicious based on an associated user profile, containing information that the system has previous aggregated, thereby conserving the bandwidth and computational resources consumed by aggregating the information about the user each time the user request to perform a cryptocurrency transaction. As another example, in certain embodiments, the system communicates an alert to the enterprise, thereby conserving the computational resources necessary to perform the cryptocurrency transaction that would be consumed obtaining enterprise review using less efficient contact methods. Furthermore, security may be increased for the enterprise because the system automatically alerts the enterprise of any suspicious transactions, allowing the enterprise to take preventative action before letting the transaction move forward. Another technical advantage of one embodiment includes aggregating information regarding a user’s past behavior in cryptocurrency transactions in order to mitigate the risk of fraud.”
The patent involves a system with three main accounts: one for customers, and two for enterprises. The first account belongs to the customer; the second is assigned to an enterprise that would serve as a holding account or depository for customer funds that are being sent out for conversion to a different currency, referred to as the “float account.” The third account, owned by a second enterprise, delivers the corresponding amount of currency that the customers are exchanging their funds for.
With over 20 patents filed under its name, Bank of America is the gaining the lead on the blockchain race. They have been staunch supporters of the technology since 2013, publishing a study saying Bitcoin is a “serious competitor to traditional money transfer providers.”