Major US Financial Institution Bank of America Files for Crypto Custody Patent
Bank of America has filed for cryptocurrency custody patent show records from the United States Patent & Trademark Office.
2018 has largely remained bearish for the cryptocurrency, with top coins experiencing huge price declines. However, that has not hindered the acceptance and adoption of the underlying blockchain technology.
Bank of America (BofA), the second largest bank in the U.S, recently applied for a second patent for the development of cryptocurrency storage systems. The bank has proposed the development of a secure custodial system targeting large-scale enterprises.
About the patent
Public documents at the U.S. Patent and Trademark Office published on August 23 indicate that Bank of America’s target is the institutions and enterprises. The patent targets the security of assets by securing them in a vault and encrypting the keys on the blockchain.
The latest BofA patent involves computing devices that handle an institution’s Blockchain Encryption Tags. It is a system that records and stores crypto-related transactions through encryption.
It then creates a digital vault that can be used for large-scale storage needs of institutions and enterprises.
The patent introduces a device within a system where a processor receives data elements, acquires an encryption key prior to encrypting the elements and then combines the encryption key with an encrypted element map.
This process ends with the device creating and encrypting a “creator tag,” embedding it within the blockchain.
The patent’s design and use predicate the fact that blockchain adoption is likely to lead to an increased need for secure storage, with blockchain-based solutions becoming very vital in the future. Thus, the bank’s patent is meant to secure its version of the custodial digital vault.
BofA patent sparks rumors
The new patent has also led to speculation that the bank may soon be venturing into the cryptocurrency industry. The speculation has been there since the bank acquired its patent for a crypto exchange in 2017.
It is one of the largest holders of patents related to the blockchain industry, on the same level or even better than tech giants like IBM. So far, the Bank of America has filed nearly 50 blockchain-related patents.
Bank of America has maintained an active presence in cryptocurrency since 2014, making various patent applications. Although the current patent focuses on digital and custodial vaults, BofA has filed patents in other areas of blockchain innovation like cold storage and payment methods.
BofA has previously banned crypto activities
However, not everything the bank does is supportive of cryptocurrency. Despite all the patents and other positive developments, Bank of America has remained skeptical about cryptocurrency in general.
For instance, the bank’s executives confirmed in May that they had banned their clients from using credit cards to buy crypto assets.
It is not out of character though; many banks are yet to warm to the idea of Bitcoin taking over transactions. But it is unfortunate because BofA is one of the leading institutions in blockchain innovation.