US banking giants Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC) are both pursuing new blockchain-related patents, according to application filings published by the US Patent and Trademark Office (USPTO) on Wednesday.
Wells Fargo’s tokeniztaion system
Called “Data element tokenization management”, Wells Fargo’s patent application was initially filed in August 2016 and details a system in which any type of ‘data element’ — a document, database value or graphics — could be located, protected, and accessed by means of tokenization.
Tokenization, according to the USPTO document, implements methods of encryption which help turn an initially unrestricted piece of data into a restricted token that can be “detokenized” only by a specified system user.
The described methods would “address the requirement to protect data even when it is stored in a publically [sic] accessible environment, such as the cloud, within a blockchain or distributed ledger, in a flexible way that is file and data element neutral,” Wells Fargo explained in its application.
“Unlike the limited, anonymous signatures supported by existing systems, this tokenization manifest supports single signers, multiple signers, or co-signers to store information publicly without loss of confidentiality of any sensitive content,” the bank elaborated.
BoE’s external data validation system
According to a separate USPTO filing released on Wednesday, Bank of America had applied for a patent for a “system for allowing external validation of data in a process data network”. The application, dated February 2016, describes how the system will use blockchain to help track important information relating to transfers and their resources.
“A need currently exists for providing a more accurate indication of a user's financial standing by allowing external validation of data in a process data network,” BoE explained.
The patent further describes how the system would record information on the blockchain based on “aggregated information associated with past transfer of resources executed by an entity,” and would update the information on the blockchain with each new transaction activity.
This is not the first patent of this kind sought by BoE. According to Fortune, the lender currently has 45 live blockchain-related patents pending.
“While we’ve not found large-scale opportunities, we want to be ahead of it we want to be prepared,” the bank’s chief technology officer, Catherine Bessant, said during the CB Insights Future of Fintech event in New York on Wednesday.
Wells Fargo and Bank of America are not alone in their desire to adapt to the future of blockchain. On Tuesday, global payment services provider MasterCard was granted a patent for a method of speeding up cryptocurrency transactions.
Banks step up blockchain adoption but stay away from crypto
While embracing the technology that underlies cryptocurrencies for their own purposes, Wells Fargo and BoE have both recently moved to ban cryptocurrency purchases via their banks’ credit cards due to perceived investment risks associated with the asset’s volatility.
“We’re doing this in order to be consistent across the Wells Fargo enterprise due to the multiple risks associated with this volatile investment. This decision is in line with the overall industry,” a Wells Fargo spokesperson said in June, noting that the bank “will continue to evaluate the issue as the market evolves.”
Similar announcements have recently been made by other financial services firms, including J.P. Morgan, Citi, Commonwealth Bank of Australia, and Lloyds Banking Group (LON:LLOY).
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