IBM Introduces ‘Near Real-Time’ Blockchain Payment Network Based on Stellar Protocol
IBM’s Blockchain World Wire (BWW) payment network is out of beta, promising simultaneous clearing and settlement of cross-border payments in “near real-time.” Based on Stellar blockchain, BWW attempts to negate banking intermediaries that add complexity and cost to the traditional international payments systems.
Sending money across borders today requires a series of intermediaries for both clearing and settlement, each adding time and cost to the process. With BWW, clearing and settlement with finality happens in near real-time. 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. It all means funds can now be transferred at a fraction of the cost and time of traditional correspondent banking.
The company says on its website:
“Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other digital asset as the bridge asset between any two fiat currencies. The digital asset facilitates the trade and supplies important settlement instructions.”
Banks use their existing payment systems connected to World Wire’s APIs to convert the first fiat currency into the digital asset. After that BWW simultaneously converts the digital asset into the second fiat currency, completing the transaction with all transaction details being recorded onto blockchain for clearing.
With this move into blockchain payments, the company will be competing with California-based startup Ripple, which already offers similar products (xCurrent and xRapid) for financial. A number of other institutions are also working towards their own similar payment solutions, with GMO Internet, Alibaba affiliate Ant Financial and others recently announcing moves in the space.
IBM has been collaborating with Stellar since October 2017, stating in March that it is interested in expanding the business applications of cryptocurrencies.
in July, IBM had partnered with Stronghold, a financial institution building an asset-agnostic global payment and trade ecosystem, to create the Stellar network’s first stablecoin.
“We see this as a way of bringing financial settlement into the transactional business network that we have been building,” IBM’s VP of global blockchain Jesse Lund said at the time.
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