US-based financial giant Wells Fargo is developing a USD-linked stablecoin that will run on the firm’s first blockchain platform. Dubbed Wells Fargo Digital Cash, the tokenised dollar will be used in a pilot initially for internal settlement across the company’s business.
The digital token will enable to settle internal cross-border payments across its global network. Its international locations will also be able to move funds between each other using the token. As banking services become increasingly digital, Wells Fargo sees a growing demand to further reduce friction regarding traditional borders, and this can be facilitated using modern technology.
Wells Fargo's proprietary digital ledger tech (DLT) platform will enable it to move money in near real-time and without impact to the underlying account, transaction postings or reconcilement infrastructure. It will also allow the firm’s international locations to move funds outside normal operating hours, remove the need for third-party payment intermediaries and cut the time and costs associated with such transactions. DLT is built on Corda Enterprise, the paid-for enterprise version of R3’s blockchain technology.
Obvious parallels can be drawn between what Wells Fargo is testing out and JPMorgan’s JPM Coin and its Interbank Information Network (IIN) which this week added Deutsche Bank to the 300-plus other banks on that network.
The pilot is scheduled for next year and will start with transfers of US dollars, but is expected to expand to other currencies. Eventually, it also aims to reach all Wells Fargo branches worldwide.
Wells Fargo has previously launched other blockchain projects, including a banking prototype and a trade finance platform aimed at the cotton market. It’s also invested in blockchain finance startup Axoni.
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