Bank giant Wells Fargo executives: Our stable currency is faster, cheaper and more efficient than SWIFT

Banking giant Wells Fargo said its internal cross-border transfer business blockchain is faster and more efficient than SWIFT. SWIFT is a communications system used by more than 11,000 financial institutions worldwide.


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The bank’s cryptocurrency, Wells Fargo Digital Cash, launched a software called Corda Enterprise this week, when funds are transferred from the payer’s account to the payee’s account at the same bank. When it uses R3's Corda Enterprise software to process internal ledger transfers.

Lisa Frazier, head of innovation at Wells Fargo, said:

“When we transfer funds around the world and need to exchange currency, we have to go through third-party banks such as SWIFT and other banks. This is a long process, and every time we connect with external parties, it takes time, energy and Work hard."

Fraser said that with these digital cash, the bank will be able to move funds 20 hours a day, and in the case of systems such as wire transfer and SWIFT, the bank can only move funds for 5 days and 6 hours a week.

She told CoinDesk:

“It's faster, cheaper, and definitely more efficient than SWIFT.”

Today, the bank needs to use SWIFT for internal book transfers between branches in different countries. However, this is not the case for the transfer of books within Wells Fargo.

Fraser said the blockchain project "will allow for digital cash exchange between these locations." The project will enter the pilot phase next year after the concept verification is successful.

Like JPM Coin, a rival to JPMorgan, Wells Fargo's digital cash will also receive one-on-one cash support. "We will hold legal tender, so this is a stable currency, we will issue digital tokens. These tokens are put into digital wallets, and then these tokens can be exchanged.

Parallel route

Fraser said that since 2016, Wells Fargo has been actively involved in blockchain testing, and she described it as an “external” test, which means that other banks and financial institutions are also involved in the test. However, she said, the bank has also been busy looking for internal use cases for distributed ledger technology (DLT).

“I think it’s amazing that we’ve found a very reliable DLT internal application. By doing so, we’re streamlining the book transfer process and reducing the use of intermediaries that can cause billing delays. So we’re expanding cross-border The operating window for foreign exchange settlement," she said.

The bank added that the Stabilization Coin project happened to be the first project developed by the bank using the R3 paid version of DLT, which is currently licensed by Wells Fargo and there are more follow-up projects on the platform.

SWIFT declined to comment, but the messaging system itself is working with R3 on a number of projects, such as linking the former gpi to the latter's Corda to enable proof of concept for "out of balance" payment settlement. The results of the PoC will be announced at the Sibos Conference in 2019. Corda's open source payment engine, Corda Settler, has also been tested with cryptocurrency XRP.

However, Wells Fargo denied any claim that the bank would link the digital currency to anything other than the internal payment system.

"R3's Corda Enterprise was chosen as the platform for our first enterprise DLT network, not CordaSettler," a spokesperson for the bank said. “Wells Fargo Digital Cash is an internal settlement service that does not associate or connect with any other potential digital cash solutions that appear in today's financial services market.”

Alex Lipton, a former bank executive, trader and quantitative analyst, said Wells Fargo's tokens could be very useful in simplifying the “intricate internal processes of banks,” but in banks and It won't be of much use outside of a few close partners.

“Big banks are too bad, they have to use SWIFT like everyone else, so in fact, they don’t distinguish between inside and outside the bank. So a token can help. But this is a sign of despair,” Lipton said. He is currently the co-founder and CTO of financial technology company Sila.

Another JPM Coin?

At first glance, Well Fargo's digital cash seems to be another Morgan coin – based on the privacy-centric Ethereum version of Quorum developed by JPMorgan.

JPMorgan executives said that although originally intended for payment between customers, the currency will eventually be used to provide digital funding for corporate blockchain projects such as chain bond issuance.

The blockchain interbank information network (IIN) created by JPMorgan Chase currently has 344 banks, and IIN uses Quorum to eliminate the pain points of internal information flow in foreign correspondent banks.

Fraser has played down any similarities between JPM Coin and Wells Fargo's digital cash. “I think they are very different,” she said.

Wells Fargo is not a member of IIN, but Fraser suggests a long-term interoperability plan.

She concluded:

“Ultimately, in the future, there will be interoperable networks. As these emerging technologies come out of their infancy, a variety of things can happen.”