Digital Assets: Square Granted US Patent For New Currency Exchange Network Including Cryptos
The new network could exchange crypto-to-fiat or vice versa in real-time.
Payments processor Square won the US patent number 10,540,639 titled “cryptocurrency payment network” for a new network. This network can seamlessly process crypto-to-fiat transactions and the reverse. According to CoinDesk, the transactions would occur automatically, in real-time, and instantly.
That would be a huge win for Jack Dorsey-owned Square, because, currently, a bitcoin transaction is rather slow. This opens up participants to losses due to the crypto’s huge volatility. This drawback renders bitcoin somewhat unsuitable for online and e-commerce transactions as well as physical retail.
However, Square is of the view that these hurdles will not exist in the new system because of its features of automatic, real-time exchange.
Square’s crypto network payment
“In one embodiment, a method includes receiving a request for payment associated with a transaction between a first user and a second user, where the request specifies a payment amount in a fiat currency and identifying an indication that the first user intends to satisfy the request for payment using a non-fiat instrument…,” reads the abstract of the patent.
To put that in plain English: “The present technology permits a first party to pay in any currency, while permitting the second party to be paid in any currency,” Square says in the application. “In this way, the technology provides benefits that remove barriers to transactions that might inhibit international commerce or commerce with certain types of currency.”
Regardless of the currency required at the other end, no manual intervention required in the transaction. The network itself would perform the exchange.
Would that put paid to a large chunk of the foreign currency business of banks and foreign currency dealers?
Interestingly, the network could accommodate other assets apart from fiat or digital currencies. These could, for instance, be assets such as loans, derivative transactions and even securities.
Square received an earlier patent for crypto payments to merchants
Square also received an earlier patent no 10,055,715 B1 on August 21, 2018, for a new payment network that permitted merchants to accept any currency including digital ones. That patent applied to a system where crypto transactions could be processed just as fast as credit card payments.
The patent envisaged the use of a private block chain to record transactions in real-time.
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