This coming October, IBM will launch Blockchain World Wire — a payment system that uses the distributed ledger technology. The giant tech corporation has been working on the project for some time now and it’s ready to move from the beta stage.
The product targets financial institutions and it’s utilizing the Stellar blockchain network. According to IBM, this new financial product will clear and settle cross-border payments in real time.
The product aims to do away with banking intermediaries as they try to cut the cost and complexity of traditional payment systems.
A document published by the IBM details how the product will work. It will substitute the banking intermediaries needed for cross-border payments with virtual assets sent over the blockchain network.
On its website, the company says two financial institutions that are transacting together will agree to use either a central bank digital currency or a stable coin or any other virtual currency as a bridge asset between any two fiat currencies. This virtual asset will ease the trade and supply vital settlement instructions.
IBM adds that using the World Wire API’s, which are installed in banks’ systems, fiat currency will be exchanged to a virtual asset at bank A. It will then be transmitted to bank B where conversion to another fiat currency happens. All these details are recorded on the Stellar blockchain for clearing.
In July a report surfaced that IBM was working with Stronghold, a crypto startup. They were developing a low-volatility stable coin which would run on the stellar platform. It would use its consensus mechanism when verifying transactions.
At the time, IBM’s Jesse Lund, the head of blockchain services catering for financial institutions said:
“What we want to do is enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks.”
With this launch, IBM will be in direct competition with Ripple. The XRP platform already has many similar products in xRapid and xCurrent which are seeing increased usage.
Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology