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IBM has quietly introduced a new blockchain solution that can simultaneously clear and settle cross-border payments in near real-time.
Called “IBM Blockchain World Wire,” the solution uses Stellar protocol and can seamlessly integrate with existing payment systems.
Importantly, the solution uses “digital assets” to settle transactions. How the process works is that two financial institutions transacting with each other agree to use a digital asset – stable coin, central bank digital currency or other digital assets – which will serve as the “bridge asset” between any two fiat currencies. The digital asset facilitates the trade and supplies important settlement instructions.
“The institutions use their existing payment systems – seamlessly connected to World Wire’s APIs – to convert the first fiat currency into the digital asset. World Wire then simultaneously converts the digital asset into the second fiat currency, completing the transaction. All transaction details are recorded onto an immutable blockchain for clearing,” it added.
As it appears, IBM Blockchain World Wire could be a competitor to xRapid, Ripple’s on-demand liquidity solution, which uses XRP token for more efficient cross-border transactions between financial institutions sending fiat payments. However, IBM’s solution not only supports any type of digital asset but also states that “For those preferring to avoid the use of digital currencies, IBM also provides alternative settlement methods.”
Benefits of the new solution include faster payment processing, lower costs, increased efficiency and more.
IBM is going to demonstrate the solution at Sibos 2018 to be held in Sydney from 22-25 October.
