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Alibaba Seeks to Eliminate Middlemen in Blockchain Payments Patent

Chinese e-commerce giant Alibaba has been exploring the use of blockchain technology to speed up international payments, according to a new patent filing.

The patent application – “A System and Method That Adjusts Account Balance on a Blockchain” – was filed with the China State Intellectual Property Office in January of this year and was revealed on Friday.

Aimed to tackle the broad concept of adjusting account balances over a blockchain, the company explained how the system could be used to facilitate cross-border transactions that specifically involve a third-party payment vendor.

For instance, the document said that third-party payment services and their banking partners in different regions will all function as nodes to form the envisioned blockchain. Subsequently each node will maintain a ledger of user balances, reflecting accounts in third-party payment vendors’ mobile wallets.

When a transaction request is initiated, the nodes would verify the user’s account balance, taking into account any legal compliance procedures that must be followed – a process enforced by triggering smart contracts encoded to the blockchain, the patent says.

The nodes would then update the balance of the users sending and receiving the transacted amount in a decentralized way, thus eliminating the need for an intermediary and avoiding the resultant delays in transaction time, according to the document.

Although Alibaba didn’t explain how or if it intends to apply the system commercially, the document was published just days after the company’s payment affiliate Ant Financial announced the launch of a blockchain-based remittance service.

As reported by CoinDesk, Ant Financial said it is now using a blockchain-based system to allow Alipay users in Hong Kong to send money to residents in the Philippines via a third-party payment vendor, and with Standard Chartered as the banking partner.

Read the full patent application below:

Alibaba cross-border payments patent filing by CoinDesk on Scribd

Alibaba image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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The SEC is Seeking Comment on Yet Another Bitcoin ETF

The U.S. Securities and Exchange Commission (SEC) is once again seeking comments on a potential bitcoin-based exchange-traded fund (ETF).

The securities regulator called for comments on a proposal by the Cboe to list and trade the SolidX Bitcoin Shares, an ETF that was in turn proposed by the VanEck SolidX Bitcoin Trust, according to documents published Tuesday.

The trust will invest in bitcoin only, the document notes – as its net assets will “consist of bitcoin held by the Trust utilizing a secure process.”

The Cboe’s filings indicate that the Trust will invest solely in bitcoin and shares in the vehicle will subsequently reflect the world’s largest cryptocurrency’s price. While its operators will buy or sell bitcoin as needed, “the Trust is not actively managed,” according to the document.

SEC is asking for comments on this proposed rule change from “interested persons.”

As previously reported by CoinDesk, this particular ETF is the result of investment firm VanEck partnering with blockchain startup SolidX. It is VanEck’s third attempt to create a bitcoin investment vehicle.

VanEck CEO Jan van Eck said he believes bitcoin is “a legitimate investment option, as a type of ‘digital gold’ that may make sense for investors’ portfolios,” despite regulatory hurdles they’ve met previously.

“We believe that collectively we will build something that may be better than other constructs currently making their way through the regulatory process. A properly constructed physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and an insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin,” he told CoinDesk at the time.

While various companies have attempted to list bitcoin ETFs in the past, the SEC has forced withdrawals in every case. The regulator has previously stated that it is concerned with the cryptocurrency’s volatility and liquidity, among other issues.

Bitcoin image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.