Wells Fargo Bank, one of the oldest and biggest US banks, says its blockchain for internal cross-border money transfers is faster and more efficient than SWIFT, the global messaging system used by over 11,000 financial institutions, Coindesk reports.
The US bank unveiled its stablecoin this week. It uses R3’s Corda Enterprise software to handle internal book transfers, when funds move from a payer’s account to a payee’s account at the same bank.
Lisa Frazier, head of the Innovation Group at Wells Fargo, said, “When we move money across the world and we need to exchange currencies, we have to go through third parties such as SWIFT and other banks. That’s a long process and every time there’s a connection with external parties, it takes time and energy and effort.”
She also told Coindesk that the digital cash would allow the bank to move funds 20 hours a day, an increase from the six to nine hours, five days a week it has when it relies on wire transfers and systems like SWIFT. “It’s faster than SWIFT, cheaper and definitely more efficient.”
From today, the bank needs to use SWIFT for international transfers, but not for domestic transfers. The blockchain project, which will go into a pilot phase next year after a successful proof-of-concept, “will allow those locations to exchange digital cash among themselves,” Frazier said.
The Wells Fargo stablecoin is a rival to the JPM Coin, but like it will be backed 1-for-1 with a non-digital currency. “We will hold the fiat currency, so it’s a stablecoin, and we will issue digital cash tokens. These tokens are placed into digital wallets and then those tokens are able to be exchanged,” Frazier told Coindesk.
Frazier also said Wells Fargo has been avidly participating since 2016 in blockchain tests that she described as “external,” meaning other banks and financial institutions were involved. However, she added that the bank has also been busy pursuing internal use cases for distributed ledger technology (DLT).