Wells Fargo announced this week that it will begin piloting an internal blockchain technology system for transfers. The company hopes it will make international transfers faster and simpler.
The blockchain will work with a cryptocurrency called Wells Fargo Digital Cash. The asset will be backed by the United States dollar and used to keep track of internal payment systems. The pilot is scheduled for launch next year, though it is being tested via transfers between the United States and Canada.
“We are eliminating the intermediaries which can often extend the timeline to be able to do cross border money transfers,” says Lisa Frazier, the head of the Innovation Group at the bank.
However, a Twitter user pointed out that Warren Buffett’s investment firm, Berkshire Hathaway, is the largest single holder of Wells Fargo stock.
Irony At Its Finest
It’s no secret that Warren Buffett despises cryptocurrencies. Often dubbed ‘the Oracle of Omaha’, he’s called Bitcoin a ‘delusion’ with ‘no unique value’ and has compared it to ‘a seashell or something’. But the irony of a Wells Fargo blockchain system is too rich for some to ignore.
Doesn't Warren "bailout" Buffet despise crypto? Oh the irony given Wells Fargo is one of his core holdings: https://t.co/73FJRE3fcs
— Mungo'the'ape (@kokotheape) September 17, 2019
Wells Fargo and R3
The bank’s announcement included details regarding the distributed ledger technology (DLT) they are utilizing. The platform will be built on the Corda Enterprise DLT—R3’s enterprise-level fee-based system. R3 also recently partnered with MasterCard for a similar project.
The company is hoping that international and interbank transfers will be cut down to near real-time speeds. Additionally, they hope to increase security for consumers using the system globally. Bank spokesman Roger Cabrera said:
“R3 Corda Enterprise was designed by and for financial institutions. It is a distributed ledger solution that allows for appropriate data confidentiality controls, scales to bank transaction volumes and throughput, and supports an information security design that is compatible with Wells Fargo’s industry regulated standards.”
Technology or Currency?
Buffett’s ironic conundrum draws attention to the reality that is facing the blockchain industry. Many pundits have expressed substantial trust in the technology that gave rise to Bitcoin, but far less in the currency itself.
Jamie Dimon, CEO of JPMorgan Chase and himself an enemy of Bitcoin, has incorporated DLT into the JPMorgan Chase banking platform with the JPM Coin, however. Wells Fargo is just another addition in the movement toward blockchain utilization.
Of course, the problem with these proprietary systems is interoperability. Regardless of which system each bank utilizes, unless they are able to interact seamlessly, they don’t solve the underlying problem consumers face.
Bitcoin, on the other hand, provides international interoperability, along with all the benefits and features of a DLT. While Warren Buffett may not appreciate or understand the digital currency, the banking world is beginning to wake up to its power.
Think Warren Buffett’s vitriol against Bitcoin is simply a lack of education and understanding, or is his assessment right, and blockchain technology is Bitcoin’s only lasting feature? Let us know in the comments below!
Images are courtesy of Shutterstock, Twitter.