IBM Blockchain launches World Wire — a payments network which uses Stellar’s XLM cryptocurrency — and signs up six international banks.
Determined to stay ahead of competition from both Ripple and JP Morgan, IBM announced on Monday the launch of a global payments network designed to support foreign exchange and cross-border transactions in more than 70 countries.
Named IBM Blockchain World Wire, the system will allow institutions to connect their existing payment systems to its APIs. Then, using blockchain technology and the Stellar protocol, enable them to settle cross-border payments in mere seconds.
Two institutions who connect via World Wire agree to use a stable coin or digital asset as a ‘bridge’ between the two fiat currencies with which they transact. World Wire will then transfer the first fiat currency into the digital asset, then into the receiving fiat currency. At the time of writing, World Wire supports the use of Stellar Lumens (XLM) and IBM and Stronghold’s US dollar stable coin as the bridge.
Jesse Lund, head of IBM Blockchain, explained the system in an episode of the Crypto Chick podcast. Speaking to host Rachel Wolfson, he said:
“We’ve created a new type of payment network that is unique in the sense that it streamlines the ability of businesses and consumers to move money around the world in real time. This enables improved transparency without sacrificing the regulatory controls and policies we need in order to make sure that there aren’t bad actors in the system. We are convening a brand new network in 72 countries that will support pay-in and payout end points in 48 currencies,”
So far, six international banks have signed letters of intent to join the World Wire network and issue stablecoins backed by their own local fiat currencies, pending regulatory approval. These include South Korean Bank Busan and Brazilian Banco Bradesco.
Stellar’s XLM was recently listed for trading on the Coinbase Pro exchange. Following the announcement of IBM Blockchain World Wire, the coin’s price leapt over 8% to $0.117.