Chinese and Korean groups own 149 of 437 granted and pending cryptocurrency patents worldwide, according to data released today by Cipher, a leading provider of patent analytics, and Beringea, a transatlantic venture capital investor. The research also shows that – of the 85 cryptocurrency patents granted globally – half are owned by Chinese or Korean groups.
The volume of cryptocurrency inventions with patents granted and pending has dramatically increased in recent years, rising more than tenfold from 33 in 2012 to 437 today. However, American and European organisations have struggled to keep pace with the innovations of Chinese and Korean groups, which are creating substantial volumes of patented cryptocurrency technology.
Only 25 patents relating to the technology have been granted in the US, and 11 of these are owned by Bank of America. Europe lags further behind with only 3 granted patents.
Chinese and Korean firms making significant headway
The research shows an unprecedented number of patents for cryptocurrency technology registered in China and Korea. Having opened its Digital Currency Research Unit in 2017, the state-owned Bank of China has risen to become the world’s leading owner of cryptocurrency inventions, with 56 granted and pending patents to its name.
While Chinese regulators have banned initial coin offerings and cryptocurrency exchanges, it is clear that the state and its leading institutions are committed to harnessing the underlying technology behind digital currencies.
Korean organisations are also embracing innovative research and development into the use of cryptocurrencies. Korea-based Coinplug owns 18 patents, making the cryptocurrency services provider and the creator of the first bitcoin ATM, the owner of the second highest number of patents globally.
American financial services and technology companies yet to commit
American and European financial institutions are more cautiously committed to the technology. Bank of America, which owns more than 2,500 patents in broader financial technologies according to Cipher data, has only 13 patents in cryptocurrencies. While this puts the firm at third place in the global rankings of patent owners, the lack of significant activity demonstrates the risk that North American firms could be left behind by the level of innovation and competition from Asia.
No other bank in the USA or Europe enters the top ten global owners of cryptocurrency patents and many traditionally dominant owners of patented technologies have yet to commit fully. Making it into the ten leading owners, PayPal and MasterCard have only six each, while IBM and Visa own five.
Nchain with Dr Craig Wright leads the way for UK cryptocurrency patents
The UK is often viewed as a key global hub for financial technology – KPMG data released last month showed investment in British fintech firms outstripped American and Asian companies for the first time in the first six months of 2018. Yet, few UK companies have made significant inroads in the race for cryptocurrency patents.
Nchain – a British company associated with Dr Craig Wright, a figure often linked with Satoshi Nakomoto, author of the original Bitcoin white paper – is the leading European owner of patents for cryptocurrency technologies with 10 granted and pending.
Nigel Swycher, CEO of Cipher, commented: “Patents provide a unique lens through which to filter hype from reality. As we enter the fourth industrial revolution, invention and innovation will be centre stage and will disrupt the way transactions are made, recorded and funded. Cryptocurrency, as part of the broader race for blockchain applications, is only in its infancy. Our data reveals companies large and small, and in all parts of the planet, are taking this very seriously indeed.”
Eyal Malinger, Investment Director at Beringea, said: “The boom and bust in the cryptocurrency market has diverted attention away from the fundamental potential of distributed ledger technologies to transform financial services and a host of global industries.
“While many important projects are open-sourced and hope to create value using tokens, patents offer a different path to monetisation and Asian companies have made significant progress in the race to capture the value of these innovations.”
This news follows our coverage of another Asian powerhouse’s rise to dominance in the world of crypto. For more on that story read; Philippines Leading the Way for Market Regulation Within Cryptocurrency.