Bank of America may be eyeing “ATM as a Service” solutions powered by blockchain tech, according to a newly revealed patent application.
The U.S.’ second largest bank already has over 50 blockchain-related patents — more than any other entity.
Originally submitted in June 2017, the patent references “banking systems controlled by data bearing records.”
“Aspects of the disclosure relate to deploying, configuring, and utilizing cash handling devices to provide dynamic and adaptable operating functions,” its abstract reads.
BoA explains there remain communication difficulties in aspects of cash handling duties across banks’ huge operations, and suggests blockchain could help ease these.
“Cash handling devices may be used in operating centers and other locations to provide various functions, such as facilitating cash withdrawals and deposits,” the patent document continues.
“In many instances, however, it may be difficult to integrate such cash handling devices with technical infrastructure that supports banking operations and other operations while also optimizing the efficient and effective technical operations of the cash handling devices and various related computer systems.”
BoA has sought to step up its efforts to snag intellectual property in the blockchain sphere over the past two years.
In November, the bank was revealed to have the most such blockchain patents at more than 50, amid curiosity as to whether it would put all to use in the near term.
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.
The world’s fourth-largest telecoms provider, Japan’s Nippon Telegraph and Telephone (NTT), has filed a patent for using blockchain tech for contract agreement, according to a U.S. Trademark and Patent Office (USPTO) release on July 19.
NTT’s patent application writes that a problem with contracts on blockchain is that each transactions “contains only the electronic signature of the sender” as the “evidence of contract agreement by the receiver is not left in the transaction.”
The patent suggests a “simple, possible way to solve this problem is to, for example, include the electronic signatures of all the involved parties in one transaction.”
Details of the patent describe an invention with the objective of “leav[ing] the evidence of a contract on a blockchain” using one digital signature for each transaction among the involved parties. The patent document continues that the second objective is to “maintai[n] credibility” throughout this process.
NTT’s patent proposal is one of several to have already surfaced from major corporations this week. As Cointelegraph reported July 18, both Mastercard and Bank of America have also released documentation for blockchain-based inventions.
The global telecoms industry meanwhile looks set to benefit significantly from blockchain in the next five years. A report released earlier this month highlights how the technology could contribute almost $1 billion in value to the sector by 2023, from just $46 million today.
Bank of America (BoA) has filed a patent for a blockchain-based system allowing the external validation of data, according to a United States Patent and Trademark Office (USPTO) patent filing released July 17.
BoA’s patent filing proposes using blockchain for tracking resource information and confirming resource transfers, noting that
“A need currently exists for providing a more accurate indication of a user’s financial standing by allowing external validation of data in a process data network.”
The patent describes how the system would record information on the blockchain based on “aggregated information associated with past transfer of resources executed by an entity,” and would update the information on the blockchain with each new transaction activity.
In April, the USPTO had published another patent from BoA for a blockchain-based storage system. According to Fortune, BoA currently has 45 live patents related to blockchain pending, with the bank’s CTO noting that the amassing of patents allows the bank to be “prepared.”
At the same time, the BoA has become infamous for its distaste for cryptocurrency, in May calling Bitcoin (BTC) “troubling” while upholding a previous decision to ban its customers from purchasing crypto using credit cards.
Despite its apparent foresight in the blockchain sphere, BoA is not without its competitors, Mastercard this week unveiling a patent of its own allowing transactions of what it calls “blockchain currencies.”
A new Bank of America patent outlines how a permissioned blockchain might restrict users while still helping them access the information they need.
Top Stories This Week
Owner Of New York Stock Exchange Mulls Over Addition Of Crypto Trading
The New York Times reported this week that the NYSE might be giving its customers the option to buy and hold Bitcoin, an assertion backed up by documents, emails, and anonymous sources that confirm these future crypto traders contracts.
Improvement Code Casper For Ethereum Network Released
A new version of Casper, a code upgrade for the Ethereum network that aims to improve the economic consensus protocol, was released this week on Github. The Casper code combines Proof-of-Work (PoW) with Proof-of-Stake (PoS), with the eventual goal for Ethereum to switch entirely to PoS.
Facebook Considers Blockchain Tech For Messaging App, Explores Cryptocurrency
The head of Facebook’s Messenger app–David Marcus, who is also on the board at crypto exchange and wallet Coinbase–announced this week that he is setting up a small working group for looking into blockchain use across Facebook. Media outlets also reported that Facebook is allegedly “very serious” about plans to launch its own cryptocurrency.
Iranians Use Crypto To Move $2.5 Bln Out Of Country
Iranians are increasingly turning to Bitcoin (BTC) and other cryptocurrencies in the wake of the US exit from a multilateral nuclear accord with the country this week. The news has plunged the country into economic turmoil, resulting in a surge of interest towards crypto.
Federal Reserve Bank Of San Fran Attributes BTC Decline To Futures Release
The Federal Reserve Bank of San Francisco wrote in an economic letter this week that Bitcoin’s decline from December’s high of $20,000 to February’s low of below $7,000 can be attributed to the natural process following the introduction of a futures market–and both the CME and the CBOE launched Bitcoin futures last December.
“Suppose you could make a lot of money trading freshly harvested baby brains. Would you do it, or would you say that’s immoral? You wouldn’t trade them, would you? It’s too awful a concept. Well, to me Bitcoin is almost as bad,” — Charlie Munger, Berkshire Hathaway VP
“I feel like I’m in two different universes, I need a passport to go between the Bitcoin world and my regular world,” — Chamath Palihapitiya, founder and CEO of VC firm Social Capital
Laws And Taxes
Colorado Passes Blockchain Bill For Records, Cyber Security
The Colorado Senate passed a bill this week that requires government offices and regulatory agencies to consider blockchain use for the protection of confidential records, citing the technology’s use in preventing criminal or unauthorized exploitation and theft.
China Government Body Considers Blockchain Standards Release In 2019
The director of the Blockchain Research Office at China’s IT Ministry said this week that a working group had already begun research on producing nationwide blockchain standards, with the goal to release the standards by the end of 2019.
European Crypto Exchanges Call For Regulation…Of Themselves
A UK crypto trading platform and an Austrian crypto exchange have asked for more clear crypto regulation in order to “know where we stand.” According to the two crypto companies, the current AML/KYC regulation leaves them uncertain as to how their businesses fit into the existing regulatory landscape.
Crypto Revenue Subject To Taxes In Azerbaijan
Azerbaijan’s Taxes Ministry announced this week that crypto-to-fiat transactions will be subject to taxation, as any amount gained by selling should be recorded as income. A local news source says that the Azerbaijani crypto market saw an uptick in popularity from May-December 2017, falling in line with last fall’s global crypto craze.
Ukrainian Legislative Body Considers Recognizing Crypto As Financial Instrument
The head of Ukraine’s National Securities and Stock Market Commission said this week that the growth of the crypto industry has made it necessary to legally recognize cryptocurrencies and adapt financial regulations: “the point of no return is the past.”
West Virginia Elections Close As First Gov’t Run Blockchain Vote In US History
Two counties in West Virginia allowed citizens this week of a certain category–members of the military and those that were eligible for absentee voting–to vote using a mobile blockchain-based platform developed by Voatz.
World’s Second Largest Software Firm Enters Blockchain Sphere
Software company Oracle will be releasing a platform-as-service product this month and decentralized ledger-based applications next month, working with both a Chilean bank and the Nigerian government in their expansion into blockchain.
Australian Blockchain Companies Repurpose Old Real Estate For BTC Mining
An unused coal plant in Australia is being turned into a Bitcoin mining operation as per a partnership between two Australian blockchain companies. The proposed mining station would occupy two hectares (almost 5 acres!) of land.
More Australia News–Gov’t Considers Blockchain For Trade Supply Chains
Australia’s government is looking into using blockchain for the country’s trade supply chain, which would improve the methods of validation and analysis of trade data, said a spokesperson for Australia’s Department of Home Affairs (DHA).
Telecom Companies Work With Blockchain Startup On Proof Of Concept
A collaboration between two major telecom companies and a blockchain startup has successfully tested inter-carrier settlement of services with blockchain. The tests will now be extended to other members of the ITW Global Leaders’ Forum
Diamond Mining Giant Tracks Diamonds From Mine To Retailer With Blockchain
De Beers has announced it has successfully tracked 100 high-value diamonds from the mine to the store using blockchain tech, as part of their commitment to only deal in conflict-free diamonds.
Mergers And Acquisitions
Bloomberg Partners With Crypto Merchant Bank For Crypto Price Index
Bloomberg has announced the release of the Bloomberg Galaxy Crypto Index (BGCI), created in collaboration with former Wall Street exec Mike Novogratz’s crypto merchant bank, Galaxy Digital Management. For the start, ten coins from the “most liquid” part of the crypto market will be listed, including BTC, ETH, XRP, and others.
Gainers and losers
The crypto markets saw a slight dip this week–most likely correlated to the news of the police investigation of South Korean exchange Upbit–bringing Bitcoin below $9,000 and Ethereum below $700. At week’s end, total market cap is around $397 bln.
Top three altcoin gainers of the week:
- Kin (36.52%)
- Ontology (13.11%)
- Skyecoin (12.84%)
Top three altcoin losers of the week:
- WaykiChain (-7.93%)
- Cryptonex (-4.56%)
- Mithril (-4.43%)
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
FUD Of The Week
Bill Gates Slams Bitcoin, Again
Microsoft founder and billionaire Bill Gates again spoke negatively this week of Bitcoin, calling it a “greater fool” investment and he would “would short it if there was an easy way to do it.” Good news, Bill, there is an easy way to do it, and Tyler Winklevoss was kind enough to tweet you direct instructions as to how.
Dear @BillGates there is an easy way to short bitcoin. You can short #XBT, the @CBOE Bitcoin (USD) Futures contract, and put your money where your mouth is! cc @CNBC @WarrenBuffett https://t.co/4JIhF5vWsZ
— Tyler Winklevoss (@tylerwinklevoss) May 7, 2018
Bank Of America Tells Its Customers, Again, They Can’t Buy Crypto With Credit Cards
Bank of America’s chief technology officer called Bitcoin “troubling” this week due to its lack of transparency–a deliberate characteristic of the cryptocurrency, which was designed in the wake of the 2008 financial crisis–and reaffirmed the decision not to let customers by crypto with BoA credit cards.
South Korean Crypto Exchange Investigated By Police For Alleged Fraud
Crypto exchange Upbit is reportedly being investigated by local police in South Korea, who believe the exchange faked its balance sheets and deceived investors. Ten investigators will conduct an audit of the exchange’s crypto holdings.
Coinhive ‘Cryptojacking’ Code Found On More Than 300 Websites
Coinhive mining code–a non-maliciously built but often maliciously used code for mining the altcoin Monero–has been found on over 300 government and university websites globally, according to a recent cyber security report. The sites affected are mainly hosted on Amazon with domains in the US, but the common denominator across all those affected is use of the Drupal content management system.
Prediction Of The Week
Fundstrat Research Uses Bitcoin Mining Costs To Predict BTC Hitting $36K By 2019
Fundstrat’s Tom Lee has predicted that Bitcoin will hit $36,000 by the end of 2019 due to a projection based on predicted growth of the mining industry. Previously, Lee had predicted $25,000 by 2020, then $91,000 by March 2020, and most recently $25,000 by the end of 2018–none of these heights mutually exclusive.
Founder at Orbs.com tells you all you need to know if you’re trapped on a desert island with the characters from hit TV show Lost and desperately need to operate a blockchain by hand.
If you’ve ever wondered how to make any kind of decision in the absolutely fairest way possible with every possible scenario thought out until the very end–related or unrelated to cryptocurrency and blockchain–wonder no longer!
Simple and efficient explanatory infographic on the basics of bitcoin for crypto newbies.
Speaking to CNBC in an edition of the network’s Squawk Box segment, BoA’s CTO Kathy Bessant said that cryptocurrencies are “designed to be not transparent” and thus hinder banks’ attempts to catch “bad guys.”
“As a payment system, I think it’s troubling, because the foundation of the banking system is on the transparency between the sender and the receiver, and cryptocurrency is designed to be nothing of the sort, in fact [it’s] designed to be not transparent,” she told the program.
BoA caused friction with its cardholders when it instigated the Bitcoin purchasing ban in February.
For Bessant, however, cryptocurrencies still represent the opposite of financial transparency.
“The way we sort of quote-unquote catch bad guys is by being transparent in the financial moment of money. Cryptos is the antithesis of that,” she added.
“Just like we don’t allow stocks to be purchased on our credit cards, we’re not going to allow cryptos or other currencies to be purchased on our credit cards.”
Weeks after the initial ban, BoA produced a report conversely identifying future risks to its business, in which it highlighted its “inability to adapt” to the competition cryptocurrency poses.
Tim Enneking is the managing director of Crypto Asset Management in San Diego, California.
My daughter is 3 years old. Bank of America is closing her bank account on May 4 because of her “risk profile” and, it would appear, her “connection” with the crypto space.
Please let me explain. My management company manages a hedge fund which does indeed routinely invest in the crypto space. Importantly, the management company itself does not trade crypto.
The fund has an account with a bank other than BoA; the management company, my wife and I, and our daughter all have our bank accounts with Bank of America. This has led to some rather curious consequences.
My wife and I opened our joint checking and savings accounts with Bank of America (in La Jolla, CA) about four years ago, well before I founded the management company. We opened a Uniform Transfers to Minors Act (UTMA) account there for our daughter shortly after she was born. We have fifty dollars a month transferred into that account automatically to kick-start her college fund; that is pretty much the extent of the activity in the account.
There have never been any transfers into or out of my daughter’s account other than with the joint account my wife and I have in the same BoA branch. There certainly has not been any activity even vaguely related to crypto assets in it.
On April 4 of this year, we received notices dated two days prior that Bank of America would restrict our accounts in 21 days and close them in 30.
The management company received three such notices (one for each of its two bank accounts and one for its BoA credit card); my wife and I received three such notices (for each bank account and for my wife’s BoA credit card); and our three-year-old daughter received one notice for her account.
Other than saying that these decisions were “final and won’t be reconsidered,” only the notice canceling the management company’s credit card had any explanation: “because your risk profile no longer aligns with the bank’s risk tolerance” – for a card linked to an account which has had an average six-figure balance since it was opened and for a company which has never had any debt whatsoever and has an eight-figure balance sheet.
It gets better.
Are you now, or have you ever been?
Just prior to our receiving these letters, on March 28, 2018, the Bank of America Money Services Business Control Center sent the management company a Customer Data Form for Money Services Businesses (MSBs), with numerous questions regarding what the management company does.
All of the questions were related to specific monetary transactions (transfers, exchanging currencies, issuing travelers checks), except the last one: “Does the Business engage in virtual/digital/crypto currency activity?”
To such a broad question, we answered yes – and duly completed the entire questionnaire and sent it back the same day.
When the cancellation notices arrived less than a week later, we were very impressed with the alacrity with which BoA operated.
Let me emphasize: the management company doesn’t deal in cryptocurrency. It doesn’t act as an exchange. It doesn’t act as a money handler. Its primary role is processing payroll for management company employees.
However, the word “crypto” does appear in its name. That apparently is a mortal sin in the eyes of BoA.
Two days after we received the notices of all of these closings of various accounts, I received a call from a woman who introduced herself as an employee of the Bank of America MSB Control Center.
She wanted to discuss some queries she had regarding our replies to certain questions on the Customer Data Form. I politely explained to her that her company had already told us that it was closing all of our accounts irrevocably, to which she blithely replied, “Oh, does that mean you don’t want to answer my questions?”
Somewhat nonplussed, I said, “What would be the point? Is there a chance that BoA then won’t close our accounts?”
To which she replied: “Oh, I have no idea about that. Are you sure that BoA is closing your accounts? If so, we’ll still close them, but if you answer my questions, we’ll have the information necessary to complete our records.”
I declined as politely as I could at that point and that was the end of the conversation.
So, aside from the fact that the right hand of Bank of America clearly does not know what the left hand is doing, it would seem to me that BoA has gone a bit far in what is clearly a knee-jerk reaction to all things “crypto” and all things related – no matter how indirectly – to crypto.
My three-year-old daughter has a risk profile which does not align with the risk tolerance of Bank of America? In that case, I’m amazed BoA has any clients at all.
Dear fiat-centric people: Please stop being so paranoid.
Please stop trying to swat a fly with a sledgehammer (if you must treat crypto assets like a fly). Using a firehose to put out a match (sorry to mix metaphors) is simply bad business. The crypto space is expanding faster than any other segment of the financial sector.
Beware: One day, you will need it more than it needs you and you will regret such un-nuanced behavior.
In the meantime, the management company, my wife, daughter and I have all opened two new sets of accounts – with different banks, just in case.
I have, however, realized what the motto of Bank of America should be:
“Ready, fire, aim!”
Child playing with abacus image via Shutterstock.
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In the document, which was originally filed in October 2016, the author describes a Blockchain-based system for authenticating data and providing secured access of said data to service providers. The patent addresses the problem of data transferring and tracking, which it says can be resolved by means of cryptographic keys in a private Blockchain:
“Embodiments of the invention utilize a private Blockchain to store various types of records to be conveyed to the service providers. In this way, the individual or entity may securely store on the Blockchain all records relevant to service providers, then provide the service providers with secured access to said records such that the providers may access only the specific records for which they are authorized, e.g. a healthcare provider may access only the healthcare records on the Blockchain.”
Further in the application, the author outlines disadvantages of traditional electronic methods of records sharing and keeping, such as e-mail attachments or uploading files to providers’ servers through providers’ websites, claiming they are sensitive to tampering as “they lack a built-in mechanism for authenticating records.”
A Blockchain-based system, according to the document, would build an efficient, secure and reliable way to store records and only provide access to authorized parties.
Earlier this month, the Bank of England in partnership with Blockchain startup Chain released a Proof-of-Concept paper, which investigates how to configure a distributed ledger system to maintain privacy between participants, share data across the network, and enable a regulatory body to control transactions.
In March, Malaysia’s central bank hinted at plans to integrate Blockchain technology into its banking sector, announcing that nine national banks had partnered to build a trade finance Blockchain project.