Wells Fargo Co-Signs Cryptocurrencies With New Digital Cash Product

CBx Vibe: Bitcoin” Soulja Boy

By CultureBanx Team

  • Wells Fargo is launching stablecoin digital cash
  • BitMEX is a leading cryptocurrency derivative exchange

Wells Fargo (WFC -0.57%) is the latest bank to jump into the cryptocurrency space with the launch of its stablecoin product, dubbed Wells Fargo Digital Cash. The tokenized dollar will allow users to move money internally across the firm’s global network in “near real-time.” Banks have taken a general “no new friends” stance on decentralized cryptocurrencies and warned against the alleged dangers of operating outside the control of a fiat-based financial system. Are banks starting to understand that they can use the technology for instant payments, while eliminating the need for middlemen?

Why This Matters: Back in the day cryptocurrency networks were a major concern for banks that didn’t want to be seen as enabling tax evasion or money laundering, but they’ve realized blockchain technology isn’t as shady as previously thought. This move into cryptocurrency is an about face for Wells Fargo, because back in July the company confirmed it was refusing to allow domestic banking customers to complete crypto-related transactions. Now, the financial firm is following JPMorgan (JPM -0.40%) into this space, which launched its JPM coin to mixed reviews earlier this year.

Banks have taken a general “no new friends” stance on decentralized cryptocurrencies and warned against the alleged dangers of operating outside the control of a fiat-based financial system

While Goldman Sachs (GS -0.69%) dipped its toes in the cryptocurrency markets last year, CultureBanx found BitMEX is way ahead of the game. CEO Arthur Hayes helms this leading cryptocurrency derivative exchange. The company offers derivative products to retail investors and has a daily trading volume approaching $3 billion. BitMEX made revenue of $83 million in 2017 and posted $21 million in revenue during January of 2018.

As institutional investors engage in these crypto coins, they’ll be looking to ease their cautiousness by having a reliable benchmark for their performance. It will be interesting to see just how much volatility institutional investors are willing to stomach as more players enter the cryptocurrency market.

What’s Next: Wells Fargo’s stablecoin is pegged to the U.S. dollar and the pilot program is planned for 2020. The concept will undergo a test for internal transfers, with a goal to expand to multi-currency transfers in the future.

CBx Vibe: Bitcoin” Soulja Boy

CONTRIBUTOR

CultureBanx Team

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