Bank of America Wins Patent For Cryptocurrency Exchange System

For many early investors, the draw to cryptocurrency is due to the lack of bank involvement in the space. However, that could soon change as Bank of America has been awarded a patent for a crypto exchange system.

The patent was awarded to Bank of America, the second largest bank in the US, Tuesday (December 5th) by the US Patent and Trademark Office

Bank of America hopes to utilize the patent to develop a cryptocurrency exchange system that would convert digital currencies from one to the another. The system would be completely automated and would determine the exchange rate between one currency to another. It would essentially work in three key parts.

First, the customer’s account. This would be similar to your existing wallets. Then, a “floater” account. This would be the holding area for the cryptocurrency, you, the customer, is trying to sell. The third part of the system would be an account that deposits the converted funds back into the original account.

Why would customers choose to use a bank exchange for their cryptocurrency as opposed to other dedicated crypto exchanges? First, the proposed system would use exchange rate data from external sources to provide customers with an optimal exchange rate.

Secondly, it would provide some oversight in the industry by evaluating illicit trade transactions and providing a risk score to those transactions. Transactions that appear to be illegal would not be processed.

For those who are skeptical of the industry and see it as a way to engage in illegal behavior, this oversight may be just what they need to convince themselves to invest.

As to when, if ever, we are to see Bank of America’s patent utilized, that is to be determined. Currently, Bank of America only wants to use this patent for “enterprise-level” accounts, meaning business accounts. They state that this is due to the large number of financial transactions business do a day with transactions involving cryptocurrency becoming more common.

This isn’t the first time Bank of America has filed for a cryptocurrency-related patents. In 2014, Bank of America developed a cryptocurrency wire transfer system where customers could convert their local currency to cryptocurrency by sending it to a foreign exchange and converting it back to the local currency.

With the awarding of this patent, it appears banks and other major business entities are now seeing cryptocurrency as legitimate and here to stay. This is a big attempt to close the gaps between the crypto-world and the banking sector. Although it may be opposed by some early crypto-investors, it also is a way to spread cryptocurrency to the masses.