Blockchain technology has shown us that a wide array of use cases can come of it, such as asset tokenization, supply chain management, digital identity, healthcare, and more.
These use cases are possible due to the technology’s unique attributes such as use of distributed ledger technology, cryptographic security, and the ability to encode smart contracts into it.
Blockchain stretches beyond cryptocurrencies and government entities, businesses and financial institutions are experimenting with its use cases.
Bank of America to Develop Blockchain-Based ATMs
On December 26, 2018, the Bank of America (BOA) filed a patent to develop blockchain-based ATMs targeting the handling of cash. Implementing blockchain technology into cash ATMs would bring about faster, more efficient, and traceable transactions, according to a report by Finance Magnets.
BOA is the second largest bank in America and they have already filed about 50 patents pertaining to the development of a financial system that uses distributed ledger technology (DLT).
They filed their latest DLT patent with the U.S. Patent and Trademark Office (USPTO) and it aims to revolutionize ATMs or cash handling devices powered by blockchain technology.
The primary reason for blockchain implementation is to improve upon the communication difficulties found in ATMs today.
As stated in the patent document:
Cash handling devices may be used in operating centers and other locations to provide various functions, such as facilitating cash withdrawals and deposits. In many instances, however, it may be difficult to integrate such cash handling devices with technical infrastructure that supports banking operations and other operations while also optimizing the efficient and effective technical operations of the cash handling devices and various related computer systems.
Therefore, there’s an innovation with the use of blockchain technology that eliminates many of the communication and connectivity problems between ATMs and financial institutions.
DLT Improves Communication
ATMs today are restricted to communicating with their particular financial institution as they run on the bank’s operating system.
DLT and blockchain technology eliminates this problem by easing these communication issues and tracking transactions more efficiently. If all goes to plan, these new ATMs will have these benefits because they will run on the same ATM network.
Customers from varying banks can use these ATMs and the back-end processes will be far more efficient for banks. It will record all cash transactions including deposits and withdrawals on the blockchain in real-time.
Trying to Stall the Cryptocurrency Revolution?
BOA sees the benefits of blockchain technology and they’re trying to adapt the same benefits to their original outdated cash system. While they may apply some of these benefits to an extent, the benefits of cryptocurrency will still outweigh the outdated cash system.
With cryptocurrency, ATMs are not even necessary as everyone can access their money directly from their mobile phone or computer.
Users of crypto do not have to pay fees to access their money and they can transfer value worldwide for much cheaper and faster than any traditional method.
The advantages of cryptocurrency over the legacy banking system and fiat currency go on and on. Big banks can try to implement and adapt these advantages to their system, but eventually people will realize what’s truly better.
Do you think the BOA will eventually add support for cryptocurrency in their blockchain-based ATMs? Or will they try to adapt the benefits of crypto to their legacy banking system? Let us know what you think in the comment section below.