IBM Launches Stellar Based Payment Network

| Publish date: 09/05/2018
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According to the official post on its website, IBM reported that it is launching a Stellar based payments network called Blockchain World Wire (BWW). The tech giant is going to demonstrate this new network to representatives from international banks at the annual Swift conference that is scheduled to be held in October this year in Sydney.

Blockchain World Wire

BWW is using Stellar’s Blockchain to make international payments between banks in near real time. This system, which has been under development since last October and was finally taken out of beta this week, can simultaneously clear as well as settle international settlements, according to IBM.

Just like Ripple, another Blockchain based payments system, BWW does away with intermediaries complicate the network and add costs to traditional cross-border systems for payments.

The summary of the platform explains that this solution utilizes digital assets to carry out transactions and serves as a store of value that has been agreed upon by all parties involved. This platform also integrates payment instruction messaging.

What this means is simple. BWW’s APIs (Application Programming Interface) are plugged into the participating banks’ existing networks. Then, the fiat currency in one bank is exchanged for a digital asset and then transmitted to the second bank. Then, once again, that digital asset is converted back to a fiat currency. BWW ensures that all transaction details are recorded on a Blockchain for clearing, thereby making them completely immutable.

To make this possible, IBM has been working with startup Stronghold to develop a stablecoin which will run on the Stellar Blockchain. This stable coin and its consensus mechanism is what will be used to verify all the transactions on the Blockchain World Wire’s network.

The Growth of Blockchain Payments Systems

With the launch of BWW, IBM will officially enter a playing field that has so far been dominated by Ripple’s xCurrent and xRapid, which have already gained a lot of global acceptance.

IBM and Ripple are not the only organizations eyeing the payments systems markets. Notable institutions such as GMO, Alibaba’s affiliate, Ant Financial and others developing their own payments systems.

According to IBM’s head of Blockchain services for financial institutions, Jesse Lund, what is happening at this time is that there is a new segment emerging – the public but permissioned Blockchain network. This segment, according to Lund, could actually end up being one of the biggest segments in the finance industry.

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