Wells Fargo, the fourth-largest bank in the US, is set to pilot its own digital currency on its Blockchain platform, the bank announced on Tuesday.
Dubbed Wells Fargo Digital Cash, the digital currency will be pegged to the US dollar and will be used to process internal settlements within all branches of the bank - national or international.
Commenting on the development, Lisa Frazier, head of innovation group at Wells Fargo, said: “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.”
The bank also detailed that the cryptocurrency will not be client-facing, meaning only the bank will use it in the settlement process.
“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,” Frazier said.
Big plans with digital currency in cross-border settlements
The bank is planning to pilot the settlement process next year but has already tested its cross-border settlement using the digital currency between its branches in Canada and the United States.
According to Coindesk, Wells Fargo has partnered with blockchain Startup R3 to build its decentralized network on Corda Enterprise, the paid enterprise-focused platform of the firm.
With this development in the digital currency, the bank has joined the likes of JP Morgan, which earlier this year announced its own cryptocurrency - JPM Coin - for its corporate clients. The bank is also working on a private blockchain called Quorum and has on-boarded more than 300 global banks on its network.
