Wells Fargo to launch proprietary digital currency
Updated with comments from Wells Fargo.
Wells Fargo is launching a pilot program for a digital currency system that will be used for efficiently settling cross-border trades internally across its global network.
According to a press release issued today, the digital currency, dubbed “Wells Fargo Digital Cash,” will run on a proprietary “distributed ledger technology” (DLT) network.
The tech, said the bank, will help “achieve near real-time money movement without impact to the underlying account, transaction postings or reconcilement infrastructure with international transactions,” while allowing it to operate its settlement infrastructure outside of restrictive operating hours.
The currency will stand in as a surrogate for whatever fiat is being traded, allowing the bank to better streamline transactions. "It tokenizes fiat currency, and moves it on an internal distributed ledger-based rail," a Wells Fargo spokesman told Decrypt.
The bank says it has already successfully—and cheaply—deployed the technology in trades between US and Canada-based accounts. Asked for more details, the spokesman said simply: "Wells Fargo Digital i Cash has been proven."
“As a result of the increasing digitization of banking services globally, we see a growing demand to further reduce friction regarding traditional borders, and today’s technology puts us in a strong position to do that,” said Lisa Frazier, head of the bank's Innovation Group, in today’s release.
“We believe DLT holds promise for a variety of use cases, and we’re energized to take this significant step in applying the technology to banking in a material and scalable way,” she added. “Wells Fargo Digital Cash has the potential to enable Wells Fargo to remove barriers to real-time financial interactions across multiple accounts in multiple marketplaces around the world.
Interestingly, among Wells Fargo’s investors is Warren Buffett, who last year described Bitcoin as “rat poison.” He did, however, describe the underlying technology, blockchain — or in Wells Fargo’s case, “DLT” — as “important.”
Meanwhile, commenters online have pointed out the bank's own (recent) stance on cryptocurrency:
I’m old enough to remember when Wells Fargo froze user accounts used to purchased cryptocurrency.
Life moves pretty fast. https://t.co/u2QnujAiL6
— ฿ully (@BullyEsq) September 17, 2019
Wells Fargo isn’t the first major lender to unveil crypto program. Early this year, JP Morgan announced its own proprietary cryptocurrency and blockchain network, dubbed JPM Coin and Quorum respectively.