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Bank of America CTO “Privately Bearish” on Blockchain

Bank of America Blockchain

An executive at Bank of America has recently put forth comments which go against the growing adoption for cryptocurrency and blockchain in 2019.

According to a report published by CNBC on Mar. 26, Bank of America’s tech and operations chief Cathy Bessant says that she is “privately bearish” on the outlook for blockchain and its potential impact for financial technology. Despite her comments, the CNBC also points out that the bank has 82 blockchain-related patents, which amounts to more than any other bank or financial firm including that of Mastercard and PayPal.

In an interview, Bessant cast doubt on the impact of blockchain in the near-term, and gave her personal opinion that the technology would fail to achieve the prominence some industry supporters believe will occur,

“What I am is open-minded. In my private scoreboard, in the closet, I am bearish.”

Nonetheless, Bessant’s private opinion on blockchain does little to diminish the dramatic steps Bank of America has taken over the last several years to prepare itself for a future of blockchain and digital assets.

As CNBC writes,

“For half a decade, Bank of America has quietly been preparing for a future in which the world of finance migrates to the blockchain.

Under tech and operations chief Cathy Bessant, the giant bank has accumulated the most patents for the technology of any financial services company, for inventions ranging from blockchain-powered ATMs to storage for cryptocurrency keys.”

While supporters of blockchain have argued that the technology is in need of more time to develop, with adoption being a slow process to start, Bessant claims that it’s more an issue of blockchain searching for a use case as opposed to being an obvious source of improvement. Bessant says she is focused on supporting technology that will help finance and significantly improve upon existing methods–two features that she finds lacking in the current state of blockchain,

“I haven’t seen one [use case] that even scales beyond an individual or a small set of transactions. All of the big tech companies will come and say ‘blockchain, blockchain, blockchain.’ I say, ‘Show me the use case. You bring me the use case and I’ll try it’.”

She added,

“I want it to work. Spiritually, I want it to make us better, faster, cheaper, more transparent, more, you know, all of those things.”

In regards to Bank of America’s stockpiling of blockchain-based patents, which Bessant has overseen since starting her position in 2010, the executive views it as a method of future proofing. Rather than allowing Bank of America to blindsided by a wave of blockchain adoption and innovation, Bessant–despite her personal doubts–is preparing the company in the event that the technology lives up to its potential.

Bessant also claimed to be most skeptical over public blockchains like Bitcoin and other cryptocurrencies. Instead, she finds greater use in private blockchains that provide intermediaries for use, similar to the stablecoin that is being developed by J.P. Morgan Chase.

The post Bank of America CTO “Privately Bearish” on Blockchain appeared first on Ethereum World News.

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Bank of America Interested in Cryptocurrency Storage Patent

Cryptocurrency–Despite the lack of positive price movement in the cryptomarkets over the preceding weeks, adoption and recognition for the industry continues to climb. While 2018 has the makings to be remembered as the worst bear cycle in the lifetime of crypto, many pundits within the industry have been keen to point out that adoption for cryptocurrency is at its highest point, with multiple fintech firms and banks looking to move into the space of blockchain and cryptocurrency.

Bank of America, the second largest banking chain in the United States, has recently filed its second patent related to cryptocurrency custodian control, this time proposing a system that provides cryptocurrency storage for large-scale enterprise.  According to public documents filed to the U.S. Patent and Trademark Office and published on Thursday, Bank of America is primarily targeting institutional investors and other enterprise in forming a source for securing private keys. This comes in addition to a similar cryptocurrency patent application filed in 2014, giving some credence to the idea that the Charlotte, North Carolina-based bank is looking to make a move into cryptocurrency, albeit in a limited capacity for now.

Details about the patent involve the use of a computing device to manage blockchain encryption tags, building upon the earlier patent by Bank of America to create a digital vault storage system for large-scale, institutional cryptocurrency usage. Predicated on the patent’s design is the idea that cryptocurrency could become a ubiquitous form of payment, reaching market saturation levels necessary for consumers to adopt en masse. Similar to the current model of storing fiat in banks, the BoA patent is building upon the idea that consumers will want a place to safeguard their crypto outside of the use of private keys–which have been pegged as a bit too complex for the average user in terms of growing mainstream adoption. BoA’s method involves the creation of digital vaults, similar to their physical counterparts, with the bank being entrusted custodian status over the funds–essentially forgoing the role of the individual in maintaining private key security and ownership. Specifically, the patent alludes to the need for improved technology if cryptocurrency continues to gain traction as a payment source,

“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 securely store cryptocurrency.”

Relative to other firms, the second largest banking branch in the United States has had an active presence in cryptocurrency, having already applied for dozens of crypto-related patents over the years. While the most recent filing focuses on the creation of a digital vault and custodial ownership, BoA also has patents pertaining to cold-storage, and payment methods for crypto that exchange in real-time. The list of patents and their nature give the indication that the bank is looking to prepare itself in the event of Bitcoin going mainstream, despite several BoA executives having been critical over the use of cryptocurrency, unsurprising comments given the relationship between crypto and the traditional world of banking. 

In addition to the aforementioned negative comments related to cryptocurrency, Bank of America has denied certain customers access to the purchase of crypto through credit cards.