Yesterday, Bank of America (BofA) filed a patent for an online vault storage system to store crypto currency security keys. This is the latest of dozens of patents filed by the bank regarding crypto since 2014. And it is at least one more for the use of storing digital assets; the other one being about cold storage. This patent though is interesting in both, its purpose and intent. It is designed for storing user’s private keys but it’s intended for enterprise level use. The bank also filed patents for systems of payment and real time conversion of crytpo currencies. All these systems combined raise a number of possibilities as to what the bank is up to.
Given the current conditions of the market and the growing trend of Bitcoin Exchange Trade Funds (ETFs), it begs the question as to what’s behind BofA’s interest in storing crypto. Especially since the bank called Bitcoin a “threat” earlier this year and negated the use of Bank of America’s credit cards to buy crypto currencies. Since then, the market has seen the entrance and evolution a lot of good new projects that offer innovation and utility. This makes them ideal for investment and an obvious match for profit hungry institutional investors; particularly, when bundled together in a fund.
Therefore, the timing seems almost perfect for BofA to make an entry into the custody market. It’s possible the bank may be setting itself up to enter this new competitive field and face off to Coinbase, the Gemini Exchange, and the Intercontinental Exchange for the custody of Bitcoin, and alt coins. And this is exactly what this pattern of behavior strongly suggests – that Bank of America may offer a custody fund in the near future. Custody of a crypto requires ultra-secure storage of the actual coins and their security keys.
In addition, simplicity is key in a successful adoption of custody. A custodian institution can offer both. A trusted institution is a preferable alternative to managing an intricate system of 60 plus long alphanumeric character access security codes. For example, Ethos; the leading universal wallet is keen in promoting its user friendly interface devoid of private keys. Instead, it offers custody of all coins with the simple use of user names and passwords.
Of course, without an official announcement, this is all speculation; assumptions grounded on the possible uses for crypto storage, payment, and transaction systems. However, why build an infrastructure perfectly designed to handle a heavy volume of transactions, if not for custody. For all intents and purposes Bank of America is fulfilling a major portion of the custody requirement. And if BofA is not building a base for custody services, at the very least is preparing to accommodate them. And it is likely it plans to provide crypto-compatible banking services. Either way, this is significant news in favor of crypto as maybe the bank is warming up to the idea of accepting crypto back into its business profile.