FinTechBlockchainIBM launches Blockchain payments network

IBM launches Blockchain payments network

Tech giant’s new Blockchain World Wire global payment network to support payments and foreign exchange in more than 50 countries.

IBM is the latest tech company to enter the hotly-contested blockchain payment race with the launch of IBM Blockchain World Wire, a real-time global payments network that has been designed to optimise and accelerate foreign exchange, cross border payments and remittances

IBM says World Wire is the first blockchain network of its kind to integrate payment messaging, clearing and settlement on a single unified network, while allowing participants to dynamically choose from a variety of digital assets for settlement.

“We’ve created a new type of payment network designed to accelerate remittances and transform cross-border payments to facilitate the movement of money in countries that need it most,” said Marie Wieck, General Manager, IBM Blockchain. “By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide.”

To date, World Wire has enabled payment locations in 72 countries, with 47 currencies and 44 banking endpoints, with more to follow in due course.

Long time coming

Commenting in a Crypto Chick podcast, Jesse Lund, head of IBM Blockchain, said that the World Wire solution has been a long time coming.

“We’ve been looking at the transformational potential of blockchain for payments for a long time. We’ve created a new type of payment network that is unique. It streamlines the ability of businesses and consumers to move money around the world in real time and improves transparency without sacrificing all the regulatory controls and policies that are needed to ensure that there are no bad actors in the system.”

Lund added that banks, like any regulated financial institution, can really play one of two roles on the network.

“One of those roles is of the market maker,” he said. “We’re partnering with regulated non-banking financial institutions who are experts in local FX and remittance activities in their regions. The network provides them with the ability to interact with similar organizations in other parts of the world, expanding their reach collectively and bilaterally.

“The other role on the network is that of a digital asset issuer or a stable coin issuer. We already have six banks lined up to issue their own stable coins in five different currencies. The banking endpoints are enabled by the participants on the network.”

On the acceptance of cryptocurrency, Lund said: “I think we have a collective propensity to think about cryptocurrencies as tradeable tokens and that’s what they are. I think we, as pioneers in this space, need to be thinking about digital assets and networks as utilities; like electricity and not think about things like ‘what is the market cap of this coin and what is that coin trading at today?’ I know that’s a natural tendency, but if we start changing our thinking, we can build solutions that are going to change the world.”

Straight-through model

World Wire provides a more straight-through model for cross border payments using the Stellar protocol that makes money transfers point-to-point in lieu of the complexities of conventional correspondent banking. It reduces intermediaries and allows users to accelerate settlement time often in seconds by transmitting monetary value in the form of digital assets, commonly known as cryptocurrencies or ‘stable coins’. This simplified approach improves operational efficiency and liquidity management, streamlining payment reconciliation and reducing overall transaction costs for financial institutions.

The network already supports settlement using Stellar Lumens and a U.S. dollar stable coin through IBM’s previously-announced collaboration with Stronghold.

Pending regulatory approvals and other reviews, six international banks, including Banco Bradesco, Bank Busan, and Rizal Commercial Banking Corporation (RCBC), have signed letters of intent to issue their own stable coins on World Wire, adding Euro, Indonesian Rupiah, Philippine Peso, Korean Won and Brazilian Real stable coins to the network. IBM will continue to expand the ecosystem of settlement assets based on client demand.

“Bradesco continuously adopts innovation that enhances customer experience and improves efficiency,” said Luiz Carlos Brandao Cavalcanti Junior, Innovation and Digital Channels Executive Director, Banco Bradesco. “The World Wire Network addresses both of these aspects, and therefore presents a valuable opportunity for Bradesco and its customers in Brazil.”

“RCBC is pleased to be an early innovator with plans to issue our own Peso stable coin on World Wire, pending final approval from our regulators,” said Manny T. Narcisco, First Senior Vice-President, RCBC. “We’re focused on innovation that adds value for our customers, and World Wire presents a tremendous opportunity to transform and enhance our payment infrastructure.”

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