The question about how serious big banks and Wall Street are getting about bitcoin and blockchain (and if they should) is somewhat of a debate in the financial ecosystem.
But Bank of America just made a move that shows it’s getting a bit more serious about the digital currency that’s got a long rap sheet for not always being on the right side of the law. Bank of America, of course, is looking at how the technology — the blockchain aspect — could innovate the fund transfer process.
A recently filed patent from Bank of America, described as being a “system and method for wire transfers using cryptocurrency,” gives a bit more insight as to why and how cryptocurrency could be a game-changer for the industry.
According to the patent application filed Sept. 17: “A system includes a memory and a processor. The processor is coupled to the memory and causes the system to receive an electronic request for a fund transfer and initiate a debit of a first amount of a first currency from a customer account.”
“In response to determining using cryptocurrency is optimal, the processor can transfer the first amount of the first currency into an account associated with a first cryptocurrency exchange and initiate the purchase of a first quantity of a cryptocurrency from the first cryptocurrency exchange. The processor can transfer the first quantity of the cryptocurrency to a second cryptocurrency exchange and initiate the sale of the first quantity of the cryptocurrency at the second cryptocurrency exchange. The processor is further able to initiate the transfer of at least a portion of the resulting currency to a recipient,” the patent reads.
For Bank of America, the interest in cryptocurrencies is really about removing the friction, delays and cost of third-party fund transfers across the globe. That’s where the mainstream banks have come into the conversation. This could mean helping facilitate cross-border payments and speeding up money transfers in general.
As the blockchain technology permits, most of the transfer action is on the back-end, but the patent suggests that Bank of America will enable the system to use any type of cryptocurrency to conduct the transfer (based on risk, price, etc.).
Recently, Barclays‘ name has been showing up in stories about bitcoin. Barclays made it clear that it’s not backing down on its support for the digital currency. While Wall Street banks in the U.S. debate the merit of the currency, it appears Britain’s High Street bank is ready to take its commitment to bitcoin to the next level. Barclays has already been testing the digital currency in labs in London, but the bank says its going to enable consumers to make charity donations using bitcoin.
Visa also recently invested in Chain, a San Francisco-based provider of blockchain technology solutions to financial institutions, helping the company in its $30 million round as it works with banks and financial institutions to determine how the blockchain technology can be harnessed in a way that can make it faster and easier to trade and transfer financial assets.
To check out what else is HOT in the world of payments, click here.