Wells Fargo’s Stablecoin is Better than SWIFT
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American financial services company Wells Fargo revealed that their blockchain, used for internal cross-border money transfers, is quicker and more productive than SWIFT, the popular global messaging system.

Announced last Tuesday, Wells Fargo Digital Cash adopted R3’s Corda Enterprise software to manage internal book transfers during a movement from a payer’s account to the payee’s within same bank.

Head of the Innovation Group at Wells Fargo, Lisa Frazier, explained:


“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.”

Using the new method will allow the bank to transfer funds 20 hours a day when the previous speed was much slower – 6 to 9 hours, five days weekly when they relied on wire transfers.

Frazier concluded:

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

This is the case for domestic internal book transfers while for transfers between branches in different countries they still need to use SWIFT.

After a successful proof-of-concept, this blockchain project will enter its pilot phase next year and according to Frazier “will allow those locations to exchange digital cash among themselves.”

Wells Fargo’s digital cash will be backed 1-for-1 with the analog kind as PMorgan’s JPM Coin. Frazier explained:

“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.”

Wells Fargo’s business path

As Frazier said, Wells Fargo has been passionately involved in external (involving other financial institutions) blockchain tests since 2016 but wanted to achieve internal use cases for distributed ledger technology (DLT) at the same time. She gave more details:

“I think the surprise is, we have found a really solid internal application for DLT on our book transfers. By doing this we are streamlining the book transfer process and are reducing the use of intermediaries that can cause a delay in settlement. Therefore we are widening the operating window for clearing of FX wires cross-border.”

SWIFT have not commented yet, but they are also working together with R3 on a couple of projects including a proof of concept to connect their gpi to Corda and enabling “off-ledger” payment settlement. The PoC’s results will be announced at Sibos 2019.

For the time being, Wells Fargo does not intend to connect its digital coins to any outside systems. As a spokesperson noted:

“R3’s Corda Enterprise was selected as the platform for our first enterprise DLT network, not CordaSettler… “Wells Fargo Digital Cash is an internal settlement service which will not be associated or connected to any other potential digital cash solutions emerging in the financial services markets today.”  

Former bank executive and co-founder of fintech company Sila also gave his opinion on the matter:

“Large banks are so bad that they have to use SWIFT like everyone else, so in effect, they don’t differentiate between inside and outside of banks. So, a coin can help. But it is a sign of desperation.”

Resemblance to the JPM coin

At first sight, Wells Fargo’s digital cash resembles JPM’s coin, which is built using Quorum, the privacy-aimed alternative to Ethereum that was developed by JPMorgan. JPMorgan executives noted that, even though it was planned for usage between clients, the coin will be used to fund enterprise blockchain projects. JPM is happy with 344 banks on its Interbank Information Network (IIN), which uses Quorum.

As for the future plans of Wells Fargo, Frazier hinted:

“Eventually in the future, there will be interoperable networks. As these emerging technologies come out of a nascent stage all kinds of things can happen.”