Wells Fargo Group announced yesterday that it will launch a dollar-linked stablecoin for cross-border payments on its internal blockchain platform. The bank said that cross-border payments can be completed outside normal office hours, reducing reliance on third-party payment companies and reducing transfer time and costs.
Following the launch of JPM Coin by JP Morgan Chase this year, the Wells Fargo Group is also preparing to launch a stablecoin belonging to the bank’s system. Like JPM Coin, it uses blockchain technology to support international cross-border payments. Lisa Frazier, head of innovation at Wells Fargo Group, said in a press release that global banking services are becoming more digital and believe that blockchain technology can help financial businesses expand. She pointed out that the stablecoin introduced this time allows the Wells Fargo Group to eliminate multiple accounts and markets, and obstacles in real-time transactions.
The Wells Fargo Digital Cash Program will be launched next year and will be used on the bank’s in-house R&D blockchain platform to support the group’s global operations. However, the group also indicated that its blockchain system is currently not connected to other platforms, meaning that it is still a closed system for the time being.
This stablecoin will be pegged to the US dollar, but there are opportunities to include more currencies in other countries in the future. Unlike other cryptocurrencies, stablecoins have almost no fluctuations in price, that is, one dollar is equivalent to one stablecoin, which is a digital version of the currency. Currently, many large organizations are studying this area. Other players in the field include Facebook who plans to launch Libra next year, but it will be linked to a basket of low-volatility assets. The purpose of stabilizing coins is to reduce the volatility of cryptocurrencies such as Bitcoin, making it easier to use in everyday life.