Bank of America has filed a patent with the US Patent & Trademark Office (USPTO) for a system of wire transfers using cryptocurrency.
Published 17th September, the patent describes a system in which funds are sent between accounts using cryptocurrency technology. The word “blockchain” or “block chain” does not appear in the patent. Thomas Edward Durbin and James Gregory Ronca, authors of the filing, state:
“Enterprises handle a large number of foreign wire transfer requests on a daily basis. As technology advances, foreign transactions have become more common. For some customers, it may be desirable to conduct a foreign wire transfer in less time than what current foreign wire transfer systems allow.” The patent mentions the cryptocurrencies Bitcoin, Litecoin, Ripple and Dogecoin. According to the filings’ abstract:
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.
Although the patent does not mention the block chain, it does make allusions to the important Bitcoin technology:
A system comprising: a memory operable to: store a customer account associated with a customer; and a processor communicatively coupled to the memory, the memory including executable instructions that upon execution cause the system to: receive an electronic request for a fund transfer from the customer; initiate a debit of a first amount of a first currency from the customer account; determine whether using cryptocurrency is optimal; in response to determining using cryptocurrency is optimal: transfer the first amount of the first currency into an account associated with a first cryptocurrency exchange; initiate the purchase of a first quantity of a cryptocurrency from the first cryptocurrency exchange, wherein the first quantity of cryptocurrency is equivalent to the first amount of the first currency; transfer the first quantity of the cryptocurrency to a second cryptocurrency exchange; initiate the sale of the first quantity of the cryptocurrency at the second cryptocurrency exchange, wherein the sale of the first quantity of cryptocurrency results in a second amount of a second currency; and initiate the transfer of at least a portion of the second amount of the second currency to a recipient.
Some Bitcoin companies have had the same idea as Bank of America. Factom for example demonstrated a way for banks like Bank of America to save money. Factom showed in a video how the Bitcoin block chain could keep Bank of America’s business operations organized for a fraction of the price.
“Factom organizes all of the documents of a mortgage into a chain of entries. Every tax return, every credit report, every title document gets hashed and put into Factom. Factom also records every payment made, every loan service transfer and every piece of court documentation related to a foreclosure,” the company wrote. BitX developed a dialogue about the same problem. As the company wrote in its blog:
At BitX we’re constantly trying to think of innovative and practical ways to bring the power of cryptocurrency to everyone. Based on feedback from a number of multinational institutions, small businesses, Bitcoin companies and regulators, we embarked on developing a system that can bridge the gap between the current reality of international money transfers, and the promise of Bitcoin.
Wire transfers are notoriously slow and inefficient, sometimes taking days and often times costing more than it is worth. In fact, the entire reason the paper cheque exists today, I would submit, is because of how inefficient the wire transfer is. The cryptocurrency model of wire transfer could revolutionize how wire transfers are done, and thus revolutionize world finance.
To view the patent filing, click here.
Images from Shutterstock and Wikipedia.