IBM has announced that its Blockchain World Wire – billed as a “real-time payments network for regulated financial institutions” – is now available in 72 countries and supports a total of 47 currencies.
The tech giant says its platform simplifies the process of making cross-border payments, eliminating middlemen to guarantee that transactions can be completed more quickly. A type of cryptocurrency known as a “stablecoin” is used to make this transaction – a digital asset which is pegged to the US dollar to eliminate price volatility. Financial institutions stand to benefit because of how this platform will reduce their overall transaction costs.
According to IBM, six banks from around the world are now planning to launch their own stablecoins through the Blockchain World Wire. Subject to regulatory approval, this would mean that cryptocurrencies pegged to the euro, Korean won, Brazilian real, Indonesian rupiah and Philippine peso will be established in future.
Jesse Lund, the head of blockchain and digital currencies at IBM, argues that this platform is desperately needed because of how the infrastructure used to facilitate payments has barely changed in 50 years, meaning they are no longer relevant to what millions of global consumers expect.
In a video unveiling the IBM Blockchain World Wire, he explained:
“The problems with cross-border transactions today and with settling transactions on an international basis today is that they’re slow because of the friction that is introduced by way of all the different intermediaries.”
Mr Lund, who worked as a banker for 18 years, believes that a “tipping point” is coming which will see digital currencies moving as easily as email – reducing the uncertainty and the high fees that can be associated with sending money internationally in the current marketplace. He went on to compare the technology to the “paradigm shift” that the internet made in connecting people.
Improving financial inclusion
With banks in Brazil, Indonesia and the Philippines among those to express an interest in the IBM Blockchain World Wire, the company says it is upbeat that its solution will help to “facilitate the movement of money in countries that need it most.” Marie Wieck, the general manager of IBM Blockchain, added:
“We expect to spur innovation and improve financial inclusion worldwide.”
Despite remittances being relied upon by hundreds of thousands, if not millions, of foreign workers around the world – in an industry that’s worth many billions – IBM claims that fluctuating exchange rates and the prospect of error-prone and insecure transactions are bad news for consumers. The company says that the World Wire increases transparency, with the use of blockchain providing “immutable transaction history.”
The statistics surrounding cross-border payments are startling, and indicate why IBM believes that this amounts to a worldwide opportunity. An infographic released by the company suggests that the payments industry is going to be worth $2tn in less than a year’s time, with growth of 7% every year. As things stand right now, every second, more than 775,000 transactions are taking place per one billion people on Earth.
IBM believes that it is well-placed to roll out its solution because of the deep in-roads it has already established with the financial world. The company claims that 97% of the world’s biggest banks were already clients of IBM before the Blockchain World Wire came along, with 90% of the world’s credit card transactions handled through the company’s infrastructure.