In a press release in October of 2017, International Business Machines Corp. (IBM) announced the launch of IBM Blockchain, a blockchain banking solution to help financial institutions “address the processes of universal cross-border payments, designed to reduce the settlement time and lower the cost of completing global payments for businesses and consumers.” IBM partnered up with a non-profit blockchain organization and currency exchange company to develop the new blockchain that purports to allow banks to rapidly “both clear and settle payment transactions around the world on a single network in near real time.”
Currently, transactions involving different currencies may require multiple intermediaries. As a result, international transactions can take days, if not weeks, to clear and may be costly. Because the new technology is blockchain-based, and uses a ledger-based system, it can minimize the potential for errors while simultaneously providing transparency and flexibility to banks. The IBM blockchain runs on the public IBM Blockchain Platform and operates by allowing the financial institutions to choose the settlement network for the exchange of central bank-issued digital assets.
IBM has collaborated with an initial group of more than a dozen banks as part of the development process. IBM and its network of banks have begun using digital currency and the IBM blockchain software to move money across borders throughout the South Pacific, and the technology is currently live in 12 “currency corridors” across the Pacific Islands and Australia, New Zealand, and the U.K. IBM anticipates that by early next year, the program will expand into South America and Southeast Asia and will process “up to 60 percent of all cross-border payments in the South Pacific’s retail foreign exchange corridors.”
IBM Blockchain is the first international payments network of its kind to support an open source blockchain network for financial services and is unlikely to be the last. This innovation marks the start of financial institutions employing blockchain technologies to deliver services more efficiently and competitively to businesses and customers.
To read the full press release, visit http://www-03.ibm.com/press/us/en/pressrelease/53290.wss.