Cross-border payments may have just gotten better with the blockchain network of Stellar integrating with IBM. IBM can now better carry out settlement and clearing of transactions with it.
IBM is working round the clock on many retail solutions and enterprises in the world of blockchains. The tech giant recently announced the launching of a cross-border payment called Blockchain World Wire. This system is supported by Stellar’s blockchain network.
In terms of payment speed, transaction efficiency, and cost, IBM brags that its payment system outsmarts those of others. It equally claims to support payments among different types and sizes of assets in the destination in the world.
How The Payment System Works
IBM recently released an official announcement where it claims that payments via the platform can be done in real time. While explaining how the Blockchain World Wire works, IBM says that even cross-border payments can be completed in real-time too.
In the said announcement, IBM categorically explains the modus operandi as follows:
Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other assets as the bridge asset between any two flat currencies. The digital asset facilitates the trade and supplies important settlement instructions. It all means (that) funds can now be transferred at a fraction of cost and time of traditional correspondent banking.
With the above process, World Wire APIs become integrated with banks’ previous payment systems. The cross-border arrangement involves a bank first converting the fiat into a digital asset before it sends it to another bank. So, the receiving bank now converts the assets to the native fiats of the receiver.
FinExtra had earlier said that IBM would show the world how this process works in a Demo soon. The demo is scheduled to take place at the Sibos Banking Conference slated for October 2018.
IBM Partners For Stability
In July this year, IBM reached a partnership with Stronghold which is a cryptocurrency startup. The essence of the partnership is to work together on a stablecoin project that is USD-pegged. Stronghold is equally powered by Stellar’s blockchain network just like the IDM is.
According to Jesse Lund who is the head of Financial Services to IBM, the reason for launching stablecoin is simple. It is to ensure that while benefitting from cryptocurrency, the company is not flouting any rule.
The partnership of IBM with stellar is expected to aid Stellar’s Lumens (XLM) crypto. This has brought a lot of vibes within the rank and file of the Stellar family. Even though IBM is yet to come out boldly to affirm this, it is anticipated that the company will adopt XLM tokens in transferring its assets.
Partnerships like this are making Stellar a big contender with Ripple in the cross-border payment ecosystem. Nevertheless, Ripple currently seems to command greater respect among financial institutions in the world than Stellar. This is probably because of its xVia and xCurrent products.