Wells Fargo tokenized deposits move cross-border payments in two minutes or less

Wells Fargo is using tokenized deposits for cross-border payments, with money reaching beneficiary accounts in two minutes or less, chief financial officer Michael Santomassimo said. "This is in production, by the way, and it's small volume so far," he said on the bank's third-quarter earnings call, according to CoinDesk's account of this week's calls.

None of the three banks put a revenue figure on the opportunity, CoinDesk reported. Goldman Sachs focused on trading, Wells Fargo on money transmission, and Morgan Stanley on advisory services.

At Goldman, analysts asked whether tokenization, decentralized finance and prediction markets could eat into the trading desk. CEO David Solomon said they might do the opposite. He compared the moment to the shift toward electronic stock trading nearly 50 years ago, when Goldman adapted and its equities business grew. "The developments are obviously creating more products, greater activity, potentially new clients, broader distribution channels," he said Tuesday.

Goldman has built GS DAP, its own platform for tokenized assets, as long ago as 2022, and has worked on tokenizing bonds, money market funds and real estate. In July it took part in a half-day run of a tokenization service from the Depository Trust & Clearing Corporation, the utility that handles much of the plumbing behind U.S. securities markets and processes quadrillions of dollars of transactions each year. Goldman is now looking at ways to use that service at larger scale, and Solomon said tokenization could cut costs, automate transactions and make assets easier to trade.

CoinDesk reported in September that Goldman's $100 billion Treasury fund, FTIXX, went onto Lynq, a venue where crypto firms park cash between trades, and stayed a traditional fund rather than a tokenized one.

Wells Fargo's payments rail is the most specific operating detail the calls yielded: in production, two minutes or less, small volume. Wells Fargo, unlike some global rivals, does not have a large international branch network, CoinDesk reported.

Deposit tokens are drawing interest beyond one bank. Canada's six largest banks are testing a shared tokenized-deposit rail, and U.S. Bank has run a cross-border pilot on Stellar with a freeze switch that stays in the issuer's hands. The projects share a common feature: banks keep the ability to stop a transfer.

Wells Fargo's crypto-adjacent work is not confined to deposits. Earlier this month CoinDesk reported the bank was in talks with Kraken parent Payward over crypto liquidity, and that the talks may not result in a deal.