- Wells Fargo will pilot an internal settlement service called Wells Fargo Digital Cash, which will run on the bank's blockchain platform, the company said Tuesday.
- The San Francisco-based bank said the stablecoin will allow it to complete internal book transfers of cross-border payments within its global network using digitized cash.
- The bank said the pilot, planned for 2020, will initially complete U.S. dollar transfers but will eventually expand to multicurrency transfers and the bank's entire branch network.
Wells Fargo sees a growing demand to reduce friction regarding traditional borders as the digitization of banking services increases globally, said Lisa Frazier, the bank's head of innovation.
"[T]oday's technology puts us in a strong position to do that," she said in a release. "We believe [distributed ledger technology] 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."
This is not the bank's first blockchain project. Wells Fargo launched a blockchain banking prototype and a trade finance platform aimed at the cotton market in 2016, according to Coindesk. That same year, the bank was also a lead investor in blockchain finance startup Axoni's $18 million Series A funding round.
Wells Fargo's renewed interest in blockchain comes at a time when banks are still gauging the technology's benefits.
Blockchain or distributed ledger technology uses a public ledger system to compile and track data in a transparent way.
Wells Fargo’s former CEO, Tim Sloan, said in March that the technology was "way oversold."
"I think the fundamental technology is very interesting, but it's been very slow to roll out," he said on stage at the Fintech Ideas Festival in San Francisco.
Mastercard CEO Ajaypal Banga, who was also on stage, echoed Sloan, saying blockchain’s "business model is not proven."
"A lot of this has to improve and change over time," he added.
That company, too, invested in its blockchain future this month, announcing a partnership with software provider R3 to develop a platform to quicken cross-border payments.
Blockchain tech is not yet mature enough for widespread adoption in the financial services market, research firm Gartner found in a study cited this week by CIO Dive.
"Blockchain standards for financial services companies are currently fragmented and immature," Fabio Chesini, the the firm's senior research director said at the Gartner IT Symposium/Xpo in South Africa. "We are three to five years until standards mature and settle."