Wells Fargo’s Stablecoin ‘Faster, Cheaper’ Than SWIFT, Says Exec

Banking giant Wells Fargo 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.

Unveiled this week, Wells Fargo Digital Cash 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.

“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,” said Lisa Frazier, head of the Innovation Group at Wells Fargo. “That’s a long process and every time there’s a connection with external parties, it takes time and energy and effort.”

Using the digital cash would allow the bank to move funds 20 hours a day, up from only six to nine hours, five days a week when it relies on wire transfers and systems like SWIFT, Frazier said.

She told CoinDesk:

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

Today, for internal book transfers between branches in different countries, the bank needs to use SWIFT. This is not the case for domestic internal book 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.

As with rival megabank JPMorgan’s JPM Coin, Wells Fargo’s digital cash will be backed 1-for-1 with the analog kind. “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 said.

Parallel paths

Frazier 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, the bank has also been busy pursuing internal use cases for…

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