Wells Fargo Plans Blockchain-Based Internal Settlement Services
The world’s fourth-largest bank, Wells Fargo, announced plans to use its digital token to pilot internal settlement services, which would run on its distributed ledger technology (DLT) platform. Per the press release September 17, 2019, the pilot project is expected to take off in 2020 and would initially focus on USD transfers.
Digital Token for Faster Transaction
Wells Fargo digital token, called “Wells Fargo Digital Cash” would be used to settle internal payments across borders, with international locations moving funds using the digital token. The use of distributed ledger technology (DLT), can enable the bank to accomplish “near real-time” money transactions seamlessly.
According to Lisa Frazier, who heads the Innovation Group at Wells Fargo, banking services are largely becoming digital, and for the company, there is a high demand to lower the tension associated with traditional borders. The Wells Fargo executive further said that the company’s proprietary DLT serves as a solution.
In addition, Frazier said:
“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. 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.”
The Wall Street bank added that the pilot project would take off in 2020 but would start with USD transfers. However, the project would later include other currencies and would extend to other Wells Fargo branches globally.
In addition, Wells Fargo’s DLT would enable the financial company’s locations to move funds even outside normal working hours limitlessly. Also, the DLT platform would eliminate third parties, and also minimize the time and cost when carrying out transactions.
Major Financial Institutions Utilizing Blockchain Technology
The transparency and immutability associated with blockchain technology attracted it to different sectors such as health, food, among others. Although DLT has not recorded massive use-cases across various industries, the technology is increasingly gaining traction among mainstream financial institutions.
In January 2019, BTCManager reported that the Head of Global Research at JPMorgan, Joyce Chang, stated that blockchain technology has the potential to improve the banking and finance industry. Later on, there were reports that JPMorgan was contemplating using DLT to improve the banking payments system.
Other financial institutions have also either used DLT or have stated plans to use the technology. Back in 2018, the Australian Stock Exchange (ASX) in a report, stated its intention to replace the traditional CHESS clearing and settlement system with blockchain technology.
Also, Standard Bank, South Africa, announced the launch of a new payments system that was blockchain-based, which would make transactions smoother and faster.