Bank of America is an international financial services and investment bank holding company with its headquarters situated in North Carolina, USA. It had been originally founded all the way back in 1998.
As per the most recent news, the abovementioned bank shall now be utilizing blockchain technology for the purposes of settling various stock trades. Bank of America is now officially a part of the United States equities settlement network that is also based on blockchain technology and had been developed by Paxos, a regulated cryptocurrency company.
Bank of America is just another example of the growing list of banks and payment processing companies that are increasingly becoming more open-minded when it comes to the world of blockchain technology, cryptocurrencies and decentralized finance (DeFi). This list also includes the likes of PayPal and JPMorgan Chase.
Paxos Settlement Service
Bank of America is only the 3rd bank to test the Paxos Settlement Service, which had also been approved by the appropriate regulators. The other banks to be a part of this service prior to Bank of America were Credit Suisse and then Nomura, respectively. Simply put, the service will enable two parties to be able to have any equities trades be settled in a matter of minutes rather than days, which was how long the process would normally take beforehand. The SEC had been the organization responsible for approving the service, and it had thus been officially greenlit in October of 2019.
As of this moment, the use of the Paxos Settlement Service is primarily restricted to internal transactions only, which are also awaiting approval by the aforementioned regulators.
Mainstream adoption is the goal
Chad Cascarilla, the Chief Executive Officer of Paxos, stated that having clients such as Bank of America onboard is crucial as it represents a key step towards being able to have the technology be widely accepted and adopted in the mainstream. This idea is even more significant when we look at the recent trend of the cryptocurrency community and how many are moving away from Bitcoin and towards altcoins. This behaviour had also been observed via a survey conducted by Bank of America not too long ago, which claimed that Bitcoin was essentially a bubble that could ultimately pop.
“The only way in which we would be able to ultimately reach mainstream adoption is through the involvement of firms such as Bank of America, who need to feel as comfortable as possible when joining in”, Cascarilla added.
Lastly, Paxos also privately operates its very own version of the widely adopted and popular Ethereum blockchain.