Bank of America is going big on blockchain
Bank of America is trying to steal a march on the latest developments in the technology behind digital currency bitcoin by loading up on blockchain-related patents.
Blockchain works like a huge, decentralized ledger for the digital currency bitcoin which records every transaction and stores this information on a global network so it cannot be tampered with.
Major financial institutions — including the Bank of England — have released a number of notes over the last year on the potential of the technology and have created teams within their organizations to look into how to develop the cryptocurrency.
But Bank of America is going one step further by attempting to patent some of the use cases of the technology. The company has already filed for 15 blockchain-related patents and is currently in the process of drafting another 20 to be submitted to the U.S. Patents and Trademark Office (USPTO) later this month, a spokesperson told CNBC on Wednesday.
“Blockchain’s very intriguing and for us it’s a balance between not wanting to be Neanderthal but not wanting to put something out in a commercial application where the commercial application is still very unclear as a technologist, the technology is fascinating,” Catherine Bessant, the chief operations and technology office at Bank of America, said during a CNBC event at Davos last week.
“And we have tried to stay on the forefront, I think we have somewhere around 15 patents, most people would be surprised at Bank of America with patents in the blockchain or cryptocurrency space. (It’s) very important in the intellectual property world to reserve our spot even before we know what the commercial application might be.”
In December, the United States Patent and Trademark Office (USPTO) published 10 of Bank of America’s applications. The USPTO publishes patent applications 18 months after they’re filed. But the latest information shows that the number of patents Bank of America has filed for and is looking to apply for is much higher.
Bank of America patents published by the USPTO showed proposals for a “cryptocurrency risk detection system” and “suspicious user alert system” among others. These patents have not yet been granted.
The technology might be some years off before becoming mainstream for banks, but institutions are taking a collaborative approach to the technology, working with start-ups and even rival lenders. A consortium of more than 25 banks, led by fintech (financial technology) company R3, is currently developing a framework for applying blockchain technology to markets.
Last year, Goldman Sachs released a note that said blockchain could “change everything” while banks from Barclays to UBS explained how the technology could be used in areas from remittances to drawing up contracts.