6 Banks Sign LOI for Stablecoins on World Wire
IBM and Stellar, in a joint announcement during the Money 2020 Asia summit in Singapore on March 18, stated that 6 international banks have signed LOIs (Letters of Intent) to launch their own stablecoins on World Wire.
World Wire is IBM’s Blockchain-powered payments network that has just gone live. Each of these international banks stated that their stablecoins will be backed by their respective countries’ national currencies.
Blockchain World Wire
IBM and Stellar (XLM) jointly launched Blockchain World Wire (BWW) in September 2018. After a detailed testing phase, the platform went live on March 18, and already as 44 banks on its service.
This payment network uses the Stellar Blockchain and it promises to let various international regulated financial institutions carry out cross-border payments faster and more cheaply than the current traditional banking systems.
Now, 6 global banks have confirmed that they will be issuing their stablecoins on BWW. These banks include Bank Busan from South Korea, Banco Bradeso from Brazil, and Rizal Commercial Banking Corporation from the Philippines.
IBM’s head of Blockchain solutions, Jesse Lund stated that the other banks – whose names are not yet published – will apparently issue stablecoins that will be backed by the Indonesian Rupiah and the Euro, besides others fiat currencies. These banks are currently awaiting regulatory approvals as well as other required reviews.
No Pay-in/Pay-out Locations in the US
The only stablecoin that is running on World Wire at the moment is a US-dollar backed coin created by the San Francisco based company Stronghold. However, while the company’s stablecoin acts as an on-ramp for the USD, there are still no pay-in or pay-out locations set up in the US.
Lund stated that the company had focused on markets outside the United States, but it would not be long before America was also added as an operational end point. He said that this would take place sometime this year, most probably in the last half.
IBM also stated that BWW already had operational payment locations 72 countries, using 48 different currencies, and with 46 separate banking endpoints where users could receive as well as send cash.
Using Stellar’s XLM
Besides developing their own stablecoins, banks on this new platform would have the option of using Stellar’s Lumens (XLM) that could be used as a bridge currency if it were to become challenging to trade one fiat currency for another.
Lund also stated that while BWW had the ability to support other cryptocurrencies, currently, the company had chosen to stick to only XLM because financial institutions were wary of the volatility of cryptos.