REPORT: BANK OF AMERICA: Preparing Crypto Custody Solutions; Files Multiple Patents

And the institutional FOMO continues across global investment banks. Every day there is a new headline, a new story, a newly minted ‘blockchain’ executive at each of these firms confirming mass adoption within the fiat financial system. Case in point: Bank of America.

Bank of America has applied for patent(s) that cover cryptocurrency storage systems for use by custodians.

Specifically, the application describes a computing device that can manage blockchain encryption tags and handle a substantial number of daily transactions.

The US Patent & Trademark Office published details of the application following its initial filing in April. It outlines a system of entrusting cryptocurrency accounts’ secured private keys to a custodian third party such as a bank. It appears to anticipate a future where the general public has mass adopted cryptocurrencies and require traditional banking services for their assets.

Describing its place and necessity in the future of financial services, the application reads: ”As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to securely store cryptocurrency.” The Bank of America began its development of this online cryptocurrency vault system in 2014.

So while top leaders at Bank of America have publicly derided Bitcoin and cryptocurrency in general, actions speak louder than words. And they are preparing for the rollout of custody solutions, structured products, and payment systems. Book it.

And just another reminder that this follows developments over the past 30-45 days all embuing continued institutional movement into the crypto space: billionaires making price predictions, Novogratz spreading the gospel, Goldman Sachs diving deeper into client crypto trading, Nasdaq preparing to list coins, Morgan Stanley adding Bitcoin analysts, and all manner of Bitcoin ETF chatter.

Add these developments to our Morgan Stanley report from Friday:

“The discussions moving through trading rooms and in strategy sessions at the firm is not whether or not crypto is sustainable or a ‘flash in the pan’ bubble that will eventually fade. The discussion is focused on regulatory approvals and guidance, strategies to benefit from those new rules, and how to best position Morgan Stanley’s crypto products (should they choose to create native structured products) and services to its largest clients.”

“Which leads us to the dialogue in the Morgan Stanley research report making the rounds today. It adds context to the discussions internally as the firm positions itself for 2019; a year that those we spoke to believe will produce massive adoption, new (and relatively tame) regulations in the US, and trading volumes set to skyrocket.”

Also, in context, from our JP Morgan and Bakkt report from early last week:

“These comments square with several other conversations connected to competing firms like Goldman Sachs, Morgan Stanley, Barclays, etc. All firms that have immense and robust commodities trading operations and annual trade volumes on ICE’s (Intercontinental Exchange and the NYSE) vast exchange network. As Bakkt attaches itself to an institutional network that has long-standing and trusted infrastructure it makes the digital asset (specific to Bitcoin at the moment) conversation much, much easier for the biggest financial institutions.”

The movement grows and broadens. And Bank of America doesn’t want to be left behind. You shouldn’t be either.



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