Wells Fargo will launch tokenized deposits for corporate clients this fall, starting with dollars and pounds for cross-border payments, CFO Mike Santomassimo told the WSJ.
Wells Fargo plans to launch tokenized deposits for corporate and commercial clients this fall, according to a report Tuesday (Aug. 4) from the Wall Street Journal. The offering will let customers transfer, program, and settle funds around the clock via tokenized deposits, or traditional funds represented as digital tokens on a blockchain, company officials told the WSJ.
The deposits will initially cover American dollars and British pounds for cross-border payments, with plans to expand into more countries and currencies next year, based on demand, Wells Fargo Chief Financial Officer Mike Santomassimo told the WSJ in an interview.
The pending launch comes as Wall Street companies are increasingly adopting blockchain tech, from tokenized money-market funds to tokenized securities platforms, with the technology considered a quicker and more efficient way to settle transactions and move funds, the WSJ notes.
A group of American banks plans to deploy a tokenized deposit network next year, and Wells Fargo says its tokenized deposits would be able to integrate with that network, along with private networks, the WSJ added. JPMorgan Chase and Citigroup both have tokenized deposit products of their own, with Citi recently creating a way for its wealthy and institutional customers to trade shares of private companies over a blockchain, the report said.
The WSJ report also points out that banks tend to lean toward tokenized deposits rather than stablecoins, which have been at the heart of a dispute between banks and crypto companies. The Federal Reserve has warned that stablecoin adoption could transform bank deposits, funding structures, and credit distribution, making these instruments strategically relevant even to lenders that never issue them on their own.
"Today, stablecoins are like a drug trying to treat 20 different problems," Prajit Nanu, founder and chief executive of real-time payments firm Nium, said in a recent interview. "Where we see a significant amount of opportunity is stablecoin not as a payments value, but as a settlement value," he added. "Where we think stablecoin has the biggest value as, is a treasury layer across all the entities, where I can move money instantly among my entities."
For Wells Fargo, the move positions the bank to compete with the tokenized products already offered by JPMorgan and Citi. The bank's Alpha Score sits at 60/100 with a Moderate label, while JPMorgan carries a 65/100 score and traded at $360.14, up 2.13% on the day.
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