Wells Fargo Tests Digital Currency for Internal Transfers
Wells Fargo plans to enter the world of cryptocurrency. The bank is testing a new service called Wells Fargo Digital Cash to conduct internal transactions.
The digital currency is linked to the U.S. dollar. Digital Cash uses blockchain technology, and payments are tracked using the bank’s distributed ledger. Currently, it is designed to make cross-border money transfers faster and less expensive. It is not designed for consumer use.
Earlier this year, JPMorgan launched a similar program known as JPM Coin. The company’s CEO, Jamie Dimon, said the currency “could one day be consumer,” but there are no plans for that at this time.
Wells Fargo will begin testing its cryptocurrency next year for transfers between the U.S. and Canada. After a successful launch, they plan to expand the service to other currencies and countries.
JPM Coin and Wells Fargo Digital Cash are unlike traditional cryptocurrencies because they have a fixed value. Bitcoin, Ether and other digital currencies may change in value, much like stocks. Libra, the currency that Facebook is developing, is backed by assets in the “Libra Reserve.”
Mastercard and Walmart may also be developing their own cryptocurrencies, according to job listings and patents filed over the last few months. Walmart’s currency would be backed by the U.S. dollar, if it comes to fruition.