Can my wife use a sponsorship letter as proof of fund to Germany on a?
No, you can not proceed like you stated. Being international student in Germany your wife shall open a blocked account for herself. Check the response to your other question. The mentioned sponsorship letter as proof of funds will not help your wife probably. You can check if it will be accepted, but will have to expect a negative outcome. The financial means must be availabe to her (account on her name) without a request to somebody else. A blocked account is not required for family members (dependents). But it must be proven that the family member can receive extensive support (food, clothing, accommodation, etc.). Does your wife have the means to do so? If helpful please upvote.