JPMorgan, UBS and Now Wells Fargo Builds Own Digital Cash
U.S.-headquartered banking giant with USD 1.9 trillion in assets, Wells Fargo, plans to pilot its internal settlement service, Wells Fargo Digital Cash, in 2020.
The service will run on Wells Fargo’s first distributed ledger technology (DLT) platform and "will not be connected to any other digital cash solutions emerging in the financial services markets today," the company said today.
It claims that the project will help to exchange funds in expanded operating hours without limitations from traditional posting infrastructure or differences in infrastructure across the network.
"Final settlement will occur without the need for third parties, reducing transfer time and costs. Corporate clients will not have to change their payment processes, cash management responsibilities or relationship management practices to benefit," the bank said, adding that they "have successfully proven the concept of moving value between the U.S. and Canada."
Moreover, the internal DLT network will be a reusable enterprise utility for Wells Fargo to build and deploy multiple DLT-based applications.
Meanwhile, as reported, another banking giant, U.S.-based JPMorgan created JPM Coin to instantly settle payments between institutional clients. The token will at first be used with a small number of JPMorgan’s institutional clients, but it may also become a consumer product.
Also, Fnality International, a brainchild of 14 major financial firms, led by UBS Group, a Swiss financial giant, is estimated to become operational in 2020. It will be in control of a blockchain-powered digital cash system and of a token called ‘utility settlement coin’ (USC).
After JPMorgan announced their plans in February this year, Brad Garlinghouse, CEO of Ripple, a California-based crypto startup focusing on the banking sector, said that he doesn't understand what problem JPM Coin solves and that the JPMorgan's project "misses the point": "introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer."