The Bank of America, which is the second largest bank in the U.S has been granted permission to operate a cryptocurrency exchange system.
Bank of America, which is the second largest bank in the U.S, has been granted permission to operate a cryptocurrency exchange system. The patent was given by the U.S Patent and Trademark unit. The bank explained how the system of digital currency will operate as far as the conversion of one digital currency to another is concerned. The automated conversion will be based on data obtained from an external source.
The patent operates a system of three parts. The first is the customer account where the cryptocurrency in kept. The other two are operated by the business, running the system.
The other two accounts are to as ‘float accounts’. The first acts as a reserve where the cryptocurrency the customer is selling is held. The last account holds an equivalent of the cryptocurrency the customer is exchanging. It then deposits the equivalent funds into the original account of the customer for withdrawal.
This system will obtain information about cryptocurrency exchange rates from sources outside the system. This information will then be the basis within which the system will determine its equilibrium exchange rate.
The system is however reserved mainly for high-level clients, mostly businesses that are involved in a huge number of transactions on a regular basis.
The patent acknowledges the fact that enterprises may be involved in a large number of transactions daily. It thus states that it is important to look for a way of converting these financial transactions into cryptocurrencies.
There will be a close analysis of the transactions for fraud. This will be done by assessing the amount exchanged and any other essential information specified by the patent. Any transaction that is deemed to be against the law will not be processed.
The bank has been in the looking into this cryptocurrency trade for a long period of time.
The system will be so efficient in that it will be able to convert a given local currency into its equivalent cryptocurrency, send to a foreign country and then convert the cryptocurrency into an equivalent of the foreign currency.