Yesterday, IBM launched its Blockchain World Wire, a global blockchain network for cross-border payments that will make use of Stablecoin by U.S. dollars and cryptocurrency to make near real-time cross border financial transactions. It is based on distributed ledger technology (DLT) for regulated financial firms.
IBM Blockchain World Wire is a real-time global payments network that works towards clearing and settling foreign exchange, cross border payments and remittances. Currently, this network can transfer funds to more than 50 countries using 47 digital coins backed by fiat currencies.
According to IBM, World Wire is the first blockchain network of its kind to integrate payment messaging and clearing and settlement on a single unified network while allowing participants to dynamically choose from a variety of digital assets for settlement.
According to a report by Cheddar, six international banks have signed letters of intent to issue their own Stablecoins backed by their national fiat currencies including Brazil’s Banco Bradesco, South Korea’s Bank Busan and the Philippines’ Rizal Commercial Banking Corporation on IBM’s Blockchain World Wire.
Advantages of Blockchain World Wire
Faster payment processing
Blockchain World Wire provides simultaneous clearing and settlement and eliminates multiple parties processing transactions.
The World Wire comes with reduced capital requirements for cross-border transactions. Even the clearing costs have been lowered.
The World Wire provides end-to-end transparency and one exchange fee between all currencies which makes it easier.
If two financial institutions that are transacting agree upon using either a Stablecoin, central bank digital currency or another digital asset as the bridge asset between any two currencies then they will be provided with trade and important settlement instructions. The institutions can use their existing payment systems by connecting it to World Wire’s APIs in order to convert the first fiat currency into the digital asset. Further, the World Wire converts the digital asset into the second fiat currency, that completes the transaction. The transaction details are recorded onto an immutable blockchain for clearing purpose.
Marie Wieck, General Manager, IBM Blockchain, said, “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. By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide.”
To know more about this news, check out IBM’s official website.