Does Bank of America’s Crypto Custody Show Irrelevance of Bitcoin ETFs?
This week, $312 billion Bank of America (BoA) filed a patent to offer crypto custody, targeting large-scale institutional investors and retail traders.
Some experts have said that the efforts of major financial institutions to create institutional products around cryptocurrencies will bolster the adoption of crypto in US markets, which will naturally lead to other publicly tradable instruments such as Bitcoin exchange-traded funds (ETFs). The patent of BoA, filed with the US Patent and Trademark Office, described a vault system with which institutions can safely store digital assets like Bitcoin. It read:“The processor is also able to deposit the quantity of cryptocurrency into a vault connected to a network and determine a total quantity of cryptocurrency deposited into the vault. The processor may also, in response to determining the total quantity of cryptocurrency deposited into the vault exceeds a threshold, facilitate the disconnection of the vault from the network.”In essence, the system of BoA is similar to the services offered by Xapo, a Hong Kong-based Bitcoin vault company that has been storing over $10 billion in Bitcoin on behalf of institutions since early 2014.With such a system in place, BoA will be able to provide a platform for its clients and large institutions in the finance sector to allocate large sums of money into the crypto sector without concerns regarding security and regulation.