Wells Fargo this week unveiled a blockchain-based stablecoin known as Wells Fargo Digital Cash and Fargo has claimed that its cross-border money transfers are faster and more efficient then SWIFT.
The stablecoin uses R3’s Corda Enterprise software to handle and keep track of the transfers that take place from one account to the other within the same bank. This new introduction would allow the bank to operate and move funds for 20 hours a day as compared to 6-9 hours, 5 days a week because it is dependent on wire transfers and systems like SWIFT.
The blockchain project will go live by next year once it has given its successful proof-of-concept to the people involved. Lisa Frazier, head of Innovation Group at Wells Fargo, explained how banks these days have to use SWIFT for inter book transfers within branches in different countries. The case, however, is different in the domestic internal book transfers.
The stable coin will be backed 1-for-1 with the analog one. They will hold the fiat currency, and digital cash tokens will be placed in digital wallets from where the tokens will be exchanged. Frazier further mentioned how the bank is busy working on using the distributed ledger technology(DLT) for internal cases.
This stablecoin project is the first project the bank is working on using the paid-for version of R3’s DLT. Alex Lipton, a former bank executive, trader, said that Wells Fargo’s coin would be handy in simplifying the banks’ internal processes, but it does not have a bright future outside the bank.
Similar to JPM Coin?
At first, the JPM Coin and Well Fargo Digital Cash might look similar to each other, but according to Frazier, they are entirely different in the way they work and the value they will have in the market.
The JPM Coin is supposed to be used for payments between the clients, but it will, later on, be used to fund enterprise and blockchain projects digitally. JPM also has 344 banks onboard on the Interbank Information Network(IIN).