IBM is preparing to demonstrate a blockchain-based alternative payments system to international banking representatives attending the annual Swift operations conference in October in Sydney.
IBM’s Blockchain World Wire aims to provide banks with a means to simultaneously clear and settle near real-time payments transactions across borders, competing with both Swift and Ripple’s xRapid payments rail.
IBM is working with Stellar on the product, which converts fiat currencies into digital assets, like Stellar’s Lumens – or any other digital currencies or bank-backed tokens – for transmission across the network.
As IBM explains it: “Financial 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.”
The vendor says the concept promises faster payments processing, lower costs and increased efficiency, while opening up access to new markets and financing activities, such as Open Account trade transactions.
IBM has already run tests of a US dollar-pegged ‘stablecoin’ from startup Stronghold on the Stellar network, and is understood to have begun a low-key launch of Blockchain World Wire ahead of its presentation to banks in Sydney.