The Bank of America (BofA) is currently leading the unofficial patent race for cryptocurrencies all over the world, filing for more applications than IBM and Alibaba.
BofA is the second largest bank in America and also the very first bank to file for applications for blockchain patents. It currently holds most blockchain patents than any other enterprise anywhere but question is, is it going to make any use of their patents or not?
BofA filed for its very first application for blockchain patents in 2014 which was later posted in 2015 by the US Patent and Trademark Office, the entity that awards copyrights in the US. It was the first bank in the world to file for an application related to the cryptocurrency or blockchain technology, however, the bank’s move to initiate filing for applications from the banking sector never came as a surprise as it was also the first bank to have previously mentioned bitcoin in a report by strategists David Woo, Ian Gordon and Vadim Iaralov.
In this report, the strategists discussed bitcoin’s potential in the value exchange industry and claimed that the cryptocurrency could also be a serious threat to the traditional payment methods. In an interview in 2016, Chief operations and technology officer at BofA, Catherine Bessant expressed her take on involvement in crypto-related activities:
As a technologist, the technology is fascinating. 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.
Despite filing for most applications for the blockchain patents, BofA is still not very optimistic about its interest in this field. As Ms. Bessant explains how BofA has emerged in this new field, she further explains the bank’s intentions on this matter:
We’ve got under 50 patents in the blockchain/distributed ledger space […] While we’ve not found large-scale opportunities, we want to be ahead of it, we want to be prepared.
Ms. Catherine Bessant clearly opens up about being unsure of the opportunities in the blockchain and cryptocurrency related activities but shows the desire of the bank that it plans on being prepared if the time comes when they find opportunities in this field.
Due to the uncertainty surrounding the cryptocurrencies, BofA banned its customers to invest in cryptocurrencies through their credit cards as they call it a risk too high. Also, in the bank’s annual report of 2017, it also mentioned that:
Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.
Hence, despite their investments in the blockchain technology, the bank could not risk offering its customers something they are not themselves sure of.
Michael Wuehler, a blockchain specialist at ConsenSys, also BofA’s former employee who happened to have listed his name in 8 of the bank’s 50 blockchain patents as an inventor called the patents useless. According to Wuehler, the move to invest in blockchain patents was to gather media attention and portray the bank as an active participant in the fintech industry. Obviously, the purpose to file for patents is not restricted to the extent of using them as well, as patents are a form of legal property that an enterprise is awarded from official authorities, in exchange for publicly unveiling its inventions.
Other sources have described this move as “an essential ingredient for companies looking to reshape the financial services industry or spawn profitable cryptocurrency-related businesses.” And why shouldn’t one go in this direction as more perks follow?
BofA has continuously filed for more patents in the recent years and in the process, it has invested in multiple types of patents from cryptocurrency exchange system to private keys storage in the last year especially. The Bank of America’s recent filing application for a blockchain patent was in reference with the storage methods for private keys and before getting itself in private keys patents, the bank filed for patents for adapting multiple digital signatures in a distributed network, a patent which suggests a system that manages data communication from online devices.
Earlier to these activities, the bank invested in other patents to be prominent in the crypto industry. This time filing for an application for a patent on a blockchain-based storage system with automated data authentication followed by further applying for a patent that allows the external validation of data.
The bank opened the year’s account as it was awarded with a patent related to the cryptocurrency exchange system that enables to convert one digital currency into another automatically, with the exchange rate to be determined based on external data feeds.
Therefore, we can analyze the Bank of America’s performance in the world of crypto as they have timely filed for more patents and are currently leading the patent race for that matter. The bank’s active participation in the blockchain technology has showed its desire to make a name in the world of crypto and not due things for later dates as it does not want to miss out on opportunities, when/if the time comes.