The world’s fourth-largest bank said cryptocurrency will allow near real-time money movement and cut out settlement middlemen, thus reducing costs from fees.
Regarding the technical aspects of this new product, Wells Fargo has built their own blockchain using Corda Enterprise, the enterprise version of R3’s blockchain technology. While we will not see this product in 2019, the bank hopes to launch Wells Fargo Digital Cash within the next year. The transfers are expected to feature only U.S. dollars at first but the institution also plans on making other currencies available as they expand their operations globally.
Lisa Frazier, head of the Innovation Group at Wells Fargo said:
“When we move money across the world and we need to exchange currencies, we have to go through third parties such as SWIFT and other banks. That’s a long process and every time there’s a connection with external parties, it takes time and energy and effort.”
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.
“I think the surprise is, we have found a really solid internal application for DLT on our book transfers. By doing this we are streamlining the book transfer process and are reducing the use of intermediaries that can cause a delay in settlement. Therefore we are widening the operating window for clearing of FX wires cross-border.”