BofA patent application hints at digital wallet plans
Bank of America has joined the likes of Walmart and Mastercard in seeking patents for blockchain technology that could be used for a digital currency or mobile wallet.
BofA's patent application describes a security system for a peer-to-peer network with a digital wallet interface, providing that interface to a user's computing device and instructions for tiered password system.
The bank contends that security for digital currencies is not adequate and that there is a need for "better" digital wallet infrastructure.
"With the increasing amount of attention being placed on digital currencies such as bitcoin and ethereum, it has become vital to develop digital wallet infrastructure so that holders of digital currencies are able to store their coins safely and securely," the application reads. "However, existing digital wallet infrastructure is underdeveloped and provides many pathways for failure and exploitation."
In an email, Bank of America's public relations office described the filing as the recording of a "concept" and not a specific product that is in production. The bank has shied away from building its own digital wallet technology, instead relying on fast issuance to enable consumers to use existing digital wallets and ancillary services such as marketing and security that touch the mobile channel.
In its patent filing, Bank of America describes "blockchain" in this context as a data ledger that stores records that may be used for cryptocurrency, digital content storage, authentication, digital identity, P2P payments, ride sharing and nonfinancial use cases such as electronic voting and medical records.
Despite its pronouncements that it's not pursuing a digital wallet, and the general reluctance to process cryptocurrency transactions among all banks, it's not unusual for BofA to apply for a blockchain patent. It already has more than 80 blockchain patents, which is more than Mastercard and PayPal, according to CNBC. Mastercard has also been active in seeking blockchain patents and is working on blockchain use cases such as B2B payments.
In the wake of Facebook's Libra announcement, cryptocurrency wallets have received more attention, as Walmart has applied for a patent to operate its own currency and Binance is planning a rival to Libra.
Bank of America's application does not list a use case in as detailed a manner as Walmart did in its patent application, but a tiered security system would give it options as the mobile payment and cryptocurrency markets develop.