IBM has officially unveiled a new payment system that it has named IBM World Wire. The system which is posted on the company’s website is being driven by the blockchain technology. In addition to being based on the technology, it will operate on the Stellar (XLM) protocol.
IBM World Wire working with Stellar
IBM World Wire project has recently been working with the Stellar protocol to fuse itself into blockchain’s sector. As a result, World Wire enables financial organizations to clear and settle payments across the borders in an instant.
IBM’s website reads, “Introducing IBM Blockchain World Wire, the new financial rail that can simultaneously clear and settle cross-border payments in near real-time. Integrating with your existing payment systems, you can replace costly opacity with affordable transparency – and that can bring greater financial opportunity to all.”
Stellar is a decentralized protocol that is open source. It is used for transferring cryptos to fiat currencies. Thus, it enables transactions across borders between any two currencies. Stellar Lumen’s (XLM) value has been rising of late following its utilization by recent projects.
How it works
Two banks may mutually agree to transact through a stable coin, a digital coin or a central bank’s virtual currency. The stable coin then clears the transaction and delivers useful settlement instructions. Consequently, the two banks integrate World Wire into their payment platform, thereby converting the fiat into a crypto. Finally, the IBM’s system converts the crypto into the initial fiat simultaneously whereby it finishes the transaction. All the details of the transactions are recorded on the blockchain hence, used for clearing on the other end.
IBM states that World Wire processes payments much faster since it settles and clears transactions simultaneously. Furthermore, the payment system is cheaper and simple and features enhanced efficiency.
World Wire is set to compete with existing payment services such as xRapid from Ripple. The latter uses the XRP coin to make instant payments across borders via blockchain based Ripple. Several financial institutions are already utilizing xRapid.
However, the majority of the banks globally already use IBM’s products. Thus, the tech firm will not find it that difficult to advertise their new project.