This week, IBM announced the launch of Blockchain World Wire
: a new global blockchain-based payments network.
This near real-time blockchain-based network is based on distributed ledger technology (DLT
) for regulated financial firms. Blockchain World Wire will introduce a new way for cross-border payments as well as global settlement (with settlements being processed in merely five to ten seconds).
According to James Wester
, research director for IDC’s Blockchain strategies, this network allows participants to transact openly, greatly reducing risks and costs with alleviating fraud. (Computerworld
Blockchain Wire will also allow organizations to execute foreign exchange settlements. The advantage of a peer-to-peer (P2P) World Wire network is the removal of banking intermediaries. Instead, this new system will reduce fees and processing time by removing central banks from the entire process.
According to Stanley Yong
, CTO of IBM Blockchain for Finance,
“…instead of having to go through a correspondent bank and a whole set of multi-hops across different nations in order for settlement to take place, what we do is allow a point-to-point transfer of value immediately, along with the exchange of financial information, which tells you to whom they’re going to deliver the money”
Wester claims that the most intriguing aspect of Blockchain Wire lies in its ability to perform transactions without U.S. dollars, instead using a “host of smaller currencies, and thus allow for access to cross-border… money transmitters in developing markets.”
"It means swapping into and out of U.S. dollars or Euros or some other major currency is no longer necessary, which affects [foreign exchange] fees, settlement times and liquidity… There are a lot of potential moving pieces, but using blockchain to do it removes a lot of those pieces by simply giving everyone access to the ledger.”
This video, published this Tuesday by IDG TECHtalk, further discusses IBM’s Blockchain Wire, the future of blockchain technology as a whole, and what that means for users and global organizations.