IBM is taking its Blockchain World Wire cross-border payment platform out of beta.
Based on Stellar protocol, IBM says the World Wire will make it possible for financial institutions to clear and settle cross-border payments – which can take up to three days to clear – “in seconds”.
According to the launch page, two financial organisations transacting together will agree to use “a stable coin, digital currency or other digital assets” as a bridge between any two fiat currencies.
The institutions then use their existing payment systems – connected to World Wire APIs – to convert the first fiat currency into the asset, while the digital asset is simultaneously converted into the second fiat, completing the transaction.
All transaction details are recorded onto an immutable blockchain for clearing.
“The solution uses digital assets to settle transactions – serving as an agreed-upon store of value exchanged between parties – as well as integrating payment instruction messages,” read an explanation of the platform.
“It all means funds can now be transferred at a fraction of the cost and time of traditional correspondent banking.”
Blockchain World Wire has been long in the making; in October 2017, The Block reported how IBM had partnered with Stellar and financial services company KlickEx Group on a blockchain banking solution designed to speed up global, cross-border payments.
When the partnership was announced amid early trials with 12 currencies in the Pacific Islands, Australia, New Zealand, and the UK, it was lauded by Stellar as having the potential to “change the way money is moved around the world”.
The launch of Blockchain World Wire puts IBM in competition with other blockchain-based payment networks, such as Ripple, which are looking to eliminate intermediaries from bank transactions that add complexity and cost to international payments.
According to Finextra, IBM plans to demo the payment platform at the Swift operations conference in Sydney in October.