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US multinational megabank Wells Fargo & Co. (NYSE:WFC) has revealed plans to launch a US dollar-linked stablecoin that will run on the company’s first blockchain platform.
The “Wells Fargo Digital Cash”
The service, dubbed “Wells Fargo Digital Cash,” is a tokenized dollar that will be used in internal settlement across the firm’s business. The stablecoin will be piloted first and will debut next year. It’s initially targeting USD transfers, but there is a wider plan to accommodate transfers in other currencies within the company’s blockchain network.
On Tuesday, the company said that the stablecoin will enable settlement of internal cross border payments on the Wells Fargo network. Also, international locations will be able to transfer funds between each other through the token.
Lisa Frazier, Wells Fargo’s head of innovation, said that with banking services increasingly becoming digital, the company sees a growing demand for minimizing challenges that come with traditional borders. She added that with technological advancement, Wells Fargo is in a strong position to reduce the friction that traditional borders present.
The Solution Will Enable the Seamless Transfer of Funds
The company has indicated that its proprietary blockchain network will enable it to transfer money in real-time. This will be seamless without impacting the underlying account, reconcilement infrastructure, or the transaction postings. It will also make it possible for international locations to transfer funds outside normal operating hours. This will do away with the need of third party payment intermediaries as well as reduce time and costs associated with the transactions.
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Wells Fargo has indicated that its blockchain is built on Corda Enterprise, which is a version of R3’s DTL. A spokesman said that R3 Corda Enterprise is a solution that enables banks to scale transaction volumes and throughput and data confidentiality controls. The system that Wells Fargo is piloting is synonymous to JPMorgan’s JPM Coin and its Interbank Information Network.
The pilot will begin next year with transfers starting in US dollars before expanding to include other currencies. The company hopes to scale the solution to all its branches worldwide.
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