Bank of America Wins Patent for Crypto Exchange System

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Dec 7, 2017 at 03:00 UTC Updated Dec 7, 2017 at 13:32 UTC

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Bank of America has been looking into cryptocurrencies for years, filing another patent in 2014 to create acryptocurrency-powered wire transfer system.

In a patent awarded by the U.S. Patent and Trademark Office on Tuesday, the second-largest bank in the U.S.outlined a potential cryptocurrency exchange systemthat would convert one digital currency into another. Further, this system would be automated, establishing the exchange rate between the two currencies based on external data feeds.

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Transactions which look illegal would not be allowed to process, the patent says.

The patent describes a potential three-part system, where the first part would be a customers account and the other two would be accounts owned by the business running the system. The user would store their chosen cryptocurrency through the customer account.

Bank of America may be looking into cryptocurrency exchange services for its corporate clients or at least keeping its options open should they become interested.

The proposed system could also evaluate transactions for potential illicit trades, calculating a risk score based on the amount of cryptocurrency being transferred and any other information available, according to the patent.

Bank of America Wins Patent for Crypto Exchange System

The proposed system would collect data from external information sources on cryptocurrency exchange rates, and use this data to establish its own optimal rate.

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 second account, referred to as a float account, would act as a holding area for the cryptocurrency the customer is selling, while the third account, also a float account, would contain the equivalent amount of the cryptocurrency the customer is converting their funds to.

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Bank of Americaimage via Rob Wilson / Shutterstock

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That system would allow users to transfer funds by converting the senders local currency into a cryptocurrency, sending it to a foreign exchange, and then converting it to the destination countrys currency.

That third account would then deposit the converted funds back into the original customer account for withdrawal.

The patent notes this service would be for enterprise-level customers, meaning that if the bank pursues this project, it would be offered to businesses.

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