Big firms are going sophisticated through total reliance on blockchain technology, the same could be said of the Industrial and Commercial Bank of China (ICBC), one of the world’s most reputable and largest bank by revenue and asset.
ICBC, which is also among China’s “Big Four” state-managed banks, has submitted an application to patent a blockchain protocol for a smart financial asset exchange.
The idea, if patented, will give room for institutions involved to appear as a node, forming a distributed network afterward. Once users from any of the participating institutions kick-start a transaction, it prompts a smart contract resulting in the validation of transaction, while relying solely on the information provided.
Although the application was filed in January, ICBC made it public last Fridays. The protocol signals that a transaction is perfect once the network receives sufficient validations from participating nodes for consensus above a pre-determined threshold.
The innovation will get rid of intermediaries as contained in the archaic system thereby enhancing the liquidity of financial assets.
According to the document, ICBC’s decision to patent the idea came from the burdensome nature of the existing method used by the bank, its slow and fund-sapping nature especially when two or more banks are involved constituted the financial institution’s decision to seek solace in blockchain technology.
The new application confirms that the bank is maniacally interested in blockchain technology since the bank, according to CoinDesk, has previously filed an application demanding to patent a blockchain innovation that has the potential to verify user’s information over a distributed network.
According to the document, orthodox transaction chain are prone to problems like efficiency, low cost, scalability and stability, which are most times challenging and fall short of meeting up with standards.
In January 2017, ICBC became the largest bank in the world after acquiring Well Fargo, South China Morning Post had reported. The financial institution, no gainsaying, has in asset a total of 24.9 trillion yuan ($3.6 trillion) at the end of 2017.
Unlike before, financial institutions are dropping traditional means of transaction especially when it comes to cross-border or interbank remitting. Large financial institutions, including central banks are not left out in this recent trend.
Recently, Western Union filed a patent with the U.S. Patent and Trademark Office. While the patent application was tabled in December 2016, it recommends a biometric verification system (fingerprint, voice sample, retina scan), to affirm that senders permit transactions before they are initiated by the system.