IBM launches cross-border blockchain payments to grease international commerce
IBM is announcing today that it has created a new cross-border blockchain payments solution with KlickEx Group and Stellar.org. The move is designed to improve efficiency and reduce the cost of making global payments for businesses and consumers.
For the first time, public blockchain technology — a kind of transparent ledger system that is distributed across the internet — is being used in a fully operational rollout to enable cross-border payments. Traditionally, cross-border payments have involved numerous intermediaries who initiate, clear, and finalize any transaction involving multiple currencies.
IBM Blockchain enables direct payments between two parties in any currency participating on the network while maintaining security. It’s another step forward for blockchain technology, and IBM said that global banking leaders and financial institutions are also participating, with the intent to help expand its use.
Big Blue is working with KlickEx Group, a regional financial services company that handles over 60 percent of annual retail foreign exchange transactions in the Pacific and European regions. IBM is also working with Stellar.org, a nonprofit that supports an open source blockchain network for financial services.
The solution uses IBM Blockchain technology to provide both clearing and settlement of trades on a single network in real time. The companies are attacking the problem of international payments, which can be costly, laborious, and error-prone. Transactions in different currencies that require multiple intermediaries can take days or weeks to complete.
The economic impact of improving the flow of both money and commerce could be profound, IBM said. According to the World Bank, initiatives to modernize payments and provide financial access could help achieve the goal of extending financial services to one billion people by 2020.
IBM wants to simplify the way funds are exchanged around the world and to reduce settlement time from days to seconds. The solution is already in production — supporting transactions in 12 currency corridors across the Pacific Islands and Australia, New Zealand, and the United Kingdom. It is being designed to augment financial flows worldwide, for all payment types and values.
Global banking leaders — including Bank Danamon Indonesia, Bank Madiri, Bank Negra Indonesia, Bank Permata, Bank Rakyat Indonesia, Mizuho Financial Group, National Australia Bank, TD Bank, Wizdraw (HK) of WorldCom Finance, and other financial institutions — are collaborating and advising in the development of the solution in order to help expand its use in other regions around the world. In the future, this IBM universal blockchain payment solution is positioned to support central bank-issued digital currencies, securities, bonds, and structured financial assets.
This means that a universal blockchain payments solution could make it possible for a farmer in Samoa to enter into a trade contract with a buyer in Indonesia. The blockchain could be used to record the terms of the contract, manage trade documentation, allow the farmer to put up collateral, secure letters of credit, and finalize transaction terms with immediate payment, thereby conducting global trade with transparency and ease.
via VentureBeat https://venturebeat.com
October 16, 2017 at 05:34AM