Bank of america crypto patent

Others have said that blockchain merely needs time to evolve and could eventually upend entire industries from finance to cloud computing and health care. As the mania over cryptocurrencies died down in the past year amid a bear market, attention and dollars have funneled into blockchain start-ups. Morgan Chase, which revealed last month that it created the first cryptocurrency backed by a major U. But Bessant, who oversees 95, technology workers and was named the most powerful woman in banking last year, is a pragmatist.

She started out at Bank of America in as a commercial banker, eventually rising to a series of top roles, including head of corporate banking and chief marketing officer. She has run the bank's global technology and operations division since Most of what she sees doesn't make sense for finance or significantly improve upon existing methods.

She said it's a technology in search of a use case, rather than something designed specifically to solve existing problems. You bring me the use case and I'll try it'. By comparison, J. Morgan has six patent applications. Bessant said most of the patents allow Bank of America's systems to plug into blockchain should the need arrive. Think of it as future-proofing the second biggest U. Private blockchains, which require intermediaries to give permission to users, could help financial institutions serve clients better and at lower cost "at some point," Bessant said.

JPM Coin It's a less radical version of blockchain because banks and other established firms control who gets to use it. Only J. Morgan clients who have been vetted for regulatory reasons will be able to transact with JPM Coin , for instance. Even there, Bessant has her doubts. Others see more potential for blockchain, especially for areas like trade finance. In some embodiments, the processing device is further configured to execute computer-readable program code to access a set of rules configured to cause the system to settle with one or more third parties based on a plurality of criteria.

In some embodiments, the computer readable instructions further cause the computer processor to record the transaction record alongside the updated net position on the distributed ledger. In some embodiments, the computer readable instructions further cause the computer processor to compare the updated net position to a predetermined threshold; and if the updated net position is greater than the predetermined threshold, initiate settlement of an amount associated with the updated net position.

In some embodiments, the computer readable instructions further cause the computer processor to if the updated net position indicates the entity owes the third party the amount, initiate payment of the amount to the third party. In some embodiments, the computer readable instructions further cause the computer processor to if the updated net position indicates the third party owes the entity the amount, initiate request of the amount from the third party.

In some embodiments, the computer readable instructions further cause the computer processor to determine settlement of the amount has occurred; and update the updated net position based on the settlement. In some of these embodiments, the computer readable instructions further cause the computer processor to record settlement between the entity and the third party on a second distributed ledger different than the distributed ledger.

In some embodiments, the computer readable instructions further cause the computer processor to access a set of rules configured to cause the system to settle with one or more third parties based on a plurality of criteria. In some embodiments, the method includes recording the transaction record alongside the updated net position on the distributed ledger.

In some embodiments, the method includes comparing the updated net position to a predetermined threshold; and if the updated net position is greater than the predetermined threshold, initiating settlement of an amount associated with the updated net position. In some such embodiments, the method includes, if the updated net position indicates the entity owes the third party the amount, initiating payment of the amount to the third party.

The features, functions, and advantages that have been discussed may be achieved independently in various embodiments of the present invention or may be combined with yet other embodiments, further details of which can be seen with reference to the following description and drawings. Indeed, the invention may be embodied in many different forms and should not be construed as limited to the embodiments set forth herein; rather, these embodiments are provided so that this disclosure will satisfy applicable legal requirements.

In the following description, for purposes of explanation, numerous specific details are set forth in order to provide a thorough understanding of one or more embodiments. It may be evident; however, that such embodiment s may be practiced without these specific details. Like numbers refer to like elements throughout. Systems, methods, and computer program products are herein disclosed that provide for real-time net settlement using a distributed ledger system. Presently, basic bank-to-bank accounting is a very expensive endeavor.

Multiple accounts are required to be maintained by people on both sides of the transactions. Accounts have exception processes that are managed by people as well. Embodiments of the present invention consolidate multiple physical bank accounts using distributed ledger technologies. Instead of creating individual relationships with every external third party, embodiments of the invention involve creating a centralized single account.

When a settlement is necessary, the money from the single account may be moved based on a set of rules dictating the relationship between two entities. Because the distributed ledger system is a trusted system, then the present system obviates the need to hold individual, unique accounts for each third party.

Utilizing the distributed ledger, both sides of the settlement have access to various details regarding the balance throughout the cycle, and the rules may dictate a transfer via wire, ACH or otherwise.

For example, the rules may dictate a transfer once the balance reaches a threshold level or at a certain time of day, for example, fifteen 15 minutes prior to closing the cycle e. By taking this approach, movement of payments is improved drastically. The money is centralized in a repository, thereby improving cash management services. The money is moved in bulk rather than moved individually by single transaction or small batch of transactions.

This reduces the chances of losing an individual payment on the payment rails bank settlement communication channels. As mentioned above, because of the transaction data present and verified on the distributed ledger, the transaction is trusted. Exceptions and amount of money being moved are both reduced. The rules may be dynamic and provide the money exactly when required by one or both of the parties to the transaction. In other embodiments, a distributed ledger need not be used.

Rather, both sides of the transaction may keep its own ledger and rules. For example, providing messaging between entities through a cycle that includes details regarding balances between the entities. Each side may maintain its own ledger or accounting details, and settlement may be made at a predetermined time or threshold, such as at the end of day.

If an entity requires settlement, for example, four 4 times a day, then the settlement rules may be implemented so that the settlement occurs based on those rules. In other words, both sides maintain an understanding of the position, and both sides would maintain a procedure for truing-up any discrepancies in the positions. Thus, there may be instances where discrepancies occur, and both sides would need to work to remedy the discrepancies in order to facilitate the system without a distributed ledger.

In essence, the system provides a real-time settling of funds without necessarily requiring a third party intermediary. The distributed ledger provides increased visibility and trust. The two-way messaging system may provide for managing synchronization of positions. The two-way communication results in the synchronization of the position based on both sides understanding the messaging. In other words, embodiments of the present invention provide a system operatively connected with a block chain distributed network and for using the block chain distributed network for providing aggregate tracking and threshold triggering.

For example, the user interface include a graphical user interface GUI or an interface to input computer-executable instructions that direct a processing device to carry out specific functions. The user interface typically employs certain input and output devices to input data received from a user second user or output data to a user.

As illustrated in FIG. In this way, the user 4 e. In some embodiments, the real-time net settlement application may be a part of an independent real-time net settlement system. In such an embodiment, the independent real-time net settlement system is maintained and operated by the entity systems The independent real-time net settlement system may comprise one or more processing devices operatively coupled to the one or more memory devices and configured to execute computer readable code stored in the one or more memory devices.

The one or more processing components 14 are operatively coupled to the one or more communication components 12 and the one or more memory components Control and signal processing functions of the system are allocated between these processing components according to their respective capabilities.

The one or more processing components 14 may include functionality to operate one or more software programs based on computer-readable instructions 18 thereof, which may be stored in the one or more memory components The one or more processing components 14 use the one or more communication components 12 to communicate with the network 2 and other components on the network 2, such as, but not limited to, the components of the user computer systems 20, third-party systems 40, or other systems.

As such, the one or more communication components 12 generally comprise a wireless transceiver, modem, server, electrical connection, electrical circuit, or other component for communicating with other components on the network 2. The one or more communication components 12 may further include an interface that accepts one or more network interface cards, ports for connection of network components, Universal Serial Bus USB connectors and the like.

In one embodiment of the present invention, the one or more processing components 14 automatically implement a distributed ledger used for tracking balances as between an entity and third parties. As further illustrated in FIG. In one embodiment of the present invention, the real-time net settlement application comprises a rules engine to perform one or more steps described in the process flows of FIG.

The user computer system 20 may be a desktop, mobile device e. The one or more processing components 24 are operatively coupled to the one or more communication components 22 and the one or more memory components As such, the one or more communication components 22 generally comprise a wireless transceiver, modem, server, electrical connection, or other component for communicating with other components on the network 2.

The one or more communication components 22 may further include an interface that accepts one or more network interface cards, ports for connection of network components, Universal Serial Bus USB connectors and the like. In one embodiment of the present invention, the real-time net settlement application in the user computer systems 20, the third party systems 40, and the entity systems 10 may comprise a special net settlement interface to display information associated with the one or more distributed ledgers, the balances of the accounts for each third party, the process steps discussed herein and the automatic actions that may be taken in response to the net settlement processes discussed herein.

In some embodiments, the user 4 utilizes the user applications 27, through the user computer systems 20, to access the entity applications 17 to perform net settlement transactions or analysis. The third party systems 40 associated with a plurality of user 5 may include similar structure as that of the user computer systems Some embodiments of this invention utilize a distributed ledger, such as a distributed ledger as used in a block chain infrastructure.

Block chain may use a specialized distributed ledger system for storing each process point of the complete payment structure for each transaction together in a block chain style format. The blocks store data packets of information pertaining to the processing of that particular transaction within the process and are chained together to form a time stamped historic record of the transaction processed from the client origination to external clearing.

Using metadata the system allows for searching and finding complex tracking and tracing across individual transactions or accounts. In some embodiments, only miner nodes may write transactions to the block chain. In other embodiments, all nodes have the ability to write to the block chain.

In some embodiments, the block may further comprise a time stamp and a pointer to the previous block in the chain. In some embodiments, the block may further comprise metadata indicating the node that was the originator of the transaction. In this way, the entire record of transactions is not dependent on a single database which may serve as a single point of failure; the block chain will persist so long as the nodes on the block chain persist. In some embodiments, nodes must be authorized to write to the block chain.

In some embodiments, nodes must also be authorized to read from the block chain. Once a transactional record is written to the block chain, it will be considered pending and awaiting authentication by the miner nodes in the block chain. The miner node ensures that the sum of the outputs of the transaction within the block matches the sum of the inputs. In some embodiments, a pending transaction may require validation by a threshold number of miner nodes.

Once the threshold number of miners has validated the transaction, the block becomes an authenticated part of the block chain. By using this method of validating transactions via a federated consensus mechanism, duplicate or erroneous transactions are prevented from becoming part of the accepted block chain, thus reducing the risk of data record tampering and increasing the security of the transactions within the system.

The centralized database architecture comprises multiple nodes from one or more sources and converge into a centralized database. The system, in this embodiment, may generate a single centralized ledger for data received from the various nodes. The single centralized ledger for data provides a difficult avenue for reviewing a record of a single transaction or payment process as it moves through the various applications for processing.

There is no means to track the individual payment through the process at any point until it has been completely posted. Even at that point, with the amount of data a centralized database digests regularly in a complex payment structure, the ability to accurately track and trace a single transaction point or account through the process is not possible. Rather than utilizing a centralized database of data for instrument conversion, as discussed above in FIG. Such a decentralized block chain configuration ensures accurate mapping of resources available within an account associated with an instrument.

Accordingly, a block chain configuration may be used to maintain an accurate ledger of transactions and the processing of each transaction through the processing applications by generation of a time stamped block and building of one or more blocks for each stage of the processing for the transaction.

In this way, the system builds a traceable and trackable historic view of each transaction within each account, capable of being searched and identified. A block chain is a distributed database that maintains a list of data records, such as real-time resource availability associated with one or more accounts or the like, the security of which is enhanced by the distributed nature of the block chain. A block chain typically includes several nodes, which may be one or more systems, machines, computers, databases, data stores or the like operably connected with one another.

In some cases, each of the nodes or multiple nodes are maintained by different entities. A block chain typically works without a central repository or single administrator.

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