Wells Fargo has unveiled that it is joining the likes of JP Morgan and Facebook in the quest to create the first great ‘corporate currency’ with its forthcoming pilot program for internal settlement service ‘Wells Fargo Digital Cash’.
Wells Fargo Digital Cash, created for internal book transfers of cross-border payments, has been built upon an internal distributed ledger technology (DLT) network which has created with the intent of reuse. As such, there are multiple forthcoming but unspecified DLT-based projects planned for the future.
The pilot is slated for a 2020 launch. It will enable Wells Fargo global locations to exchange funds out-of-hours compared to traditional financial transfers which are time restricted, as well as eliminating the need for third party middlemen. Wells Fargo Digital Cash will also “drive operational efficiencies, including longer operating windows and real-time processing” and will help the company achieve near real-time money movement.
The Rise of Corporate Cryptocurrencies
There has been considerable growth over the past 12 months with regards to projects which seek to introduce largely centralized, corporate cryptocurrencies to the market.
JP Morgan, for example, created its own digital payments currency back in February called the ‘JPM Coin’ which it described as a “digital coin representing a fiat currency”. Meanwhile, the Libra token (created by a consortium, led by Facebook) is linked to a ‘basket’ of fiat currencies rather than just one and is being treated as a threat by entities such as the US government.
These projects have been a cause for concern among members of the community also, due to their centralized status combined with the legal ramifications and restrictions that corporate cryptocurrency may (inadvertently) bring upon blockchain as a whole. Ripple is controversial for similar reasons.
In related news: Wells Fargo became the third high-profile name association this month for crypto startup Plaid after the two companies partnered together for a new data exchange project.
The partnership sees the two companies entering into a ‘data exchange agreement’, in which Wells Fargo accounts and services will be integrated into the Plaid API; with a strong focus on data privacy, security and control.
Lisa Frazier, head of the Innovation Group at Wells Fargo
“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,”
“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.”