The US Patent & Trademark Office (USPTO) has published a patent filed by US financial services giant Bank of America that seeks to protect a system for wire transfers using cryptocurrency technology.
The patent, filed on 17th March, 2014, and published 17th September, seeks to protect a system by which electronic funds could be sent between customer accounts using the underlying blockchain of a given cryptocurrency as the rails for payment.
The system described, for example, would enable customer funds to be converted at a cryptocurrency exchange and then sent to a second cryptocurrency exchange to be converted into a foreign currency before the value is moved to a recipient.
Speaking to the goal of the invention described, authors Thomas Edward Durbin and James Gregory Ronca write:
“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.”
Durbin and Ronca suggest that such a system would be designed to “bypass” traditional wire transfer services, “reducing dependency on third-party networks” and “increasing the reliability of fund transfers”.
“Initiating fund transfers using cryptocurrency allows for the technical effect of conducting a foreign fund transfer in less time than a foreign fund transfer currently, as it avoids delays that may be caused by relying on third-party systems and services,” the filing continues.
Further, it suggests that fund transfers using cryptocurrency would reduce the need to transfer customer information to a “third-party system”, thereby “increasing control and security of customer data” during such transactions.
While the filing uses the term “cryptocurrency” generally throughout, it does name bitcoin, litecoin, Ripple and dogecoin as specific examples.
Representatives from Bank of America did not immediately respond to requests for comment.
Assessing need
One of the more interesting aspects of the filing is the way in which it envisions the method by which cryptocurrency would be selected as the preferred option for transmitting funds.
For example, Bank of America states that its transaction module may choose from a number of available cryptocurrencies and cryptocurrency exchanges based on factors such as price and market volatility.
“For example, transaction module 136 may choose a particular cryptocurrency exchange because the cryptocurrency is priced favorably (eg, cheap if purchasing, expensive if selling) or because the cryptocurrency exchange has a relationship with the enterprise,” the filing reads.
OKCoin, Bitstamp, BTCC (formerly BTC China), Cryptsy, CoinMarket and Justcoin (since purchased by ANX) are named as examples of cryptocurrency exchanges that could be used.
The filing goes on to state that the module would seek to initiate the buying and selling of cryptocurrency near simultaneously in an effort to facilitate a cost-effective transfer.
A separate module would then initiate the transfer of funds, handling the security aspects of the transaction.
For more information, read the full filing here.
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