Wells Fargo To Pilot DLT-powered Cross-border Settlement

wellsfargo dlt 091819

US-based bank Wells Fargo is set to pilot cross-border payment settlements powered by distributed ledger technology (DLT). The financial services company will use its internal settlement service called Wells Fargo Digital Cash, which will run on Wells Fargo's first DLT platform.

The Wells Fargo Digital Cash platform will help boost operational efficiencies, including longer operating windows and real-time processing.

The pilot, planned for 2020, is initially expected to complete USD transfers, and will later expand to multicurrency transfers encompassing the entire global Wells Fargo branch network.

The internal DLT network is proprietary and will not be connected to any other digital cash solutions emerging in the current financial services markets.

The new platform will enable Wells Fargo to complete internal book transfers of cross-border payments within its global network using digitized cash. Meanwhile, the international locations will exchange the digitized cash among themselves.

Wells Fargo has already successfully moved value between the U.S. and Canada. The internal DLT network will now enable Wells Fargo to build and deploy multiple DLT-based applications to remove barriers to real-time financial interactions across multiple accounts in multiple marketplaces.

The new platform will enable the global locations of Wells Fargo to exchange funds in expanded operating hours without limitations from traditional posting infrastructure or differences in infrastructure across the network.

The final settlement will occur without the need for third parties, reducing transfer time and costs. Corporate clients of the bank will also not have to change their payment processes, cash management responsibilities or relationship management practices for accessing the platform.

DLT provides a permanent, highly secure and trusted record of transactions. The real-time money movement will also not impact to the underlying account, transaction postings or reconcilement infrastructure with cross-border transactions, where platforms and processes differ.

In 2016, The Commonwealth Bank of Australia (CBA) and Wells Fargo had successfully completed the world's first global trade transaction via blockchain between two independent banks. The trade involved the letter of credit being executed through a digital smart contract stored on a private distributed ledger, using Skuchain's Brackets system.

They represented their respective customers, Brighann Cotton Marketing Australia and Brighann Cotton US, for a transaction involving a shipment of 88 bales of cotton from Texas, USA to Qingdao, China.

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