Bank of America is researching how blockchain technology could increase the speed of their transactions.
A patent application released by the U.S. Patent and Trademark Office (USPTO) on Thursday explains a concept of using the blockchain to facilitate payments between two parties using the transaction requests as a proxy.
The filing adds American Express to a plethora of other banks and financial service providers looking to adopt blockchain technology to increase the speed and transparency of payments. In October of 2017, JPMorgan began utilizing the blockchain to make their payment networks more efficient and secure.
The proposed system operates by running payment requests through the blockchain, and the system would either approve or reject the request based on a variety of factors, including risk. If accepted, the payment would automatically be processed and adjust the two parties accounts accordingly.
The payments would be sent from, and received by, a digital wallet created by both parties. The patent filing cites the volatility of bitcoin and the public nature of the payments ledger as risks. Although the public could trace the transaction amounts, where the money goes after being converted to a state currency would be completely private.
In addition to discussing the practicality of peer-to-peer transfers through the blockchain, the patent also discusses the potential use of the blockchain technology in traditional card payments, saying, “A payment network based on peer-to-peer payments may be used to facilitate most functions of traditional card payment networks and to enable additional services and functionality."
In a report published on the American Express website, the author describes the usefulness of the blockchain, ending their report with, “Blockchain technology is set to revolutionize international payments.”