Wells Fargo & Company, a U.S.-based financial giant, intends to launch a pilot of an internal settlement service that is based on distributed ledger technology (DLT) in 2020.
According to the Sept. 17 press release, Wells Fargo’s DLT-based platform is designed to use digitized cash to perform international payments through internal book transfers within its global network. It already carried out successful tests on the money transfers concept between Canada and the United States.
Real-time money transactions
In the pilot program, the firm hopes to have real-time money transactions, transaction postings and cross-border transactions reconcilement infrastructure that doesn’t rely on the underlying account.
Ostensibly, with DLT, the firm aims to cut transfer time, reduce transaction costs and eliminate the need for third parties.
Wells Fargo Innovation Group head Lisa Frazier said that the company saw increased demand for reduction of traditional borders friction, with the system.
Frazier continued to state:
“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.”
With the launch of the pilot project, the company will initially focus on USD transfers as it scales up to the multicurrency transfers in the long-term. Although according to the announcement, it won’t be linked to other similar solutions that are cropping up in the market since the DLT internal network is proprietary.
Blockchain’s Transformative power
The pilot plan comes just two days after Raphael Auer — an economist at the Bank for International Settlements — campaigned for embedded supervision, which is aimed to monitor tokenized markets automatically.
According to him, financial markets development will be enhanced with smart contracts, and DLT as middleman-based data verification will eventually be excluded with the new data credibility and transparency forms.
Gartner — information technology service management giant — predicted earlier in September that blockchain has the transformative power that is anticipated to impact most industries within 10 years.
18% of the CIOs in the banking and investment services revealed – as Per Gartner – that within the next 12 months, they would adopt some form of blockchain technology — and, another 15% said they hope to do so in the next two years.