Wells Fargo, a major United States bank with USD 1.9 trillion of assets, has announced that they will be piloting a US Dollar backed stablecoin on a distributed ledger technology (DLT) platform. Specifically, Wells Fargo is utilizing R3’s Corda Enterprise technology.
Lisa Frazier, the head of the Innovation Group at Wells Fargo, says:
“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.”
The new stablecoin will facilitate rapid cross-border payments in the Wells Fargo global network, and then the stablecoin can be exchanged locally or internationally among users. If this pilot is successful, the bank plans on launching additional DLT-based applications.
Wells Fargo is not the only bank piloting stablecoin technology. JPMorgan has launched JPM Coin which can be sent to over 300 banks within their network.
It is expected that the Wells Fargo pilot will start in 2020, and initially only use US dollars, but will eventually expand to other major global fiat currencies.
The point of using a stablecoin within a DLT, which is a form of blockchain technology, is that it simultaneously provides cryptographic security and transparency. Also, stablecoins can be sent instantly, which is faster than international fiat payment options.
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