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IBM enters blockchain universe with World Wire payments network

Geeta Nair

IBM has entered the world of blockchain with World Wire, a new global payments network, to support payments and foreign exchange for banks and non-banking finance companies. IBM is calling this a radical overhauling of the way money moves and a reinvention of the payments systems. While the current payments networks do not talk to each other and and are not interoperable, the new IBM network is open and does not differentiate between currencies.
The product provides real-time settlement using a variety of digital assets and is not partial to any one asset. This blockchain solution is for regulated financial institutions. It is the first such blockchain network of its kind to integrate payments messaging, clearing and settlement on a single unified network while allowing participants to dynamically choose from a variety of digital assets for settlement.

IBM s Blockchain World Wire optimises and accelerates foreign exchange, cross-border payments and remittances. World Wire has enabled payments locations in 72 countries with 47 currencies and 44 banking endpoints. Local regulations will continue to guide activation and IBM is actively growing the networks and they can join the network is free.

The global financial infrastructure has not changed in the last 50 years and the biggest barrier for this is fear of change, Jesse Lund, head of Blockchain and digital currencies at IBM, said.

But now banks have begun to change and were looking to become more innovative. They have to prepare for the advent of crypto currencies just like they had prepared for Y2K twenty years ago, Lund said. No one can ignore crypto currencies and regulators are getting involved and this will evolve over time, he said.

IBM has built the network for financial institutions to interact and transact with each other. IBM does not want to be a bank but will remain a network operations, he said. The regulatory restrictions in some of the markets were a concern but they were interacting with regulators, he said. IBM launched the World Wire blockchain product at the Asia Money 20/20 conference on fintech and payment solutions in Singapore on Tuesday.

Bradesco, Bank Busan, Korean Won, Rizal Commercial Banking Corporation and Brazilian Real Stable have signed letters of intent to issue their own stable coins on World Wire. Adding euro, Indonesian rupiah, Philippine peso, Korean won and Brazilian real stable coins to the network.

The network already supports settlement using Stellar Lumens and a US dollar stable coin through IBM s previously announced collaboration with Stronghold. Six international banks, including World Wire, use the Stellar protocol that makes money transfers point-to-point in lieu of the complexities of the conventional correspondent banking.

It reduces intermediaries and allows users to accelerate settlement time often in seconds by transmitting monetary value in the form of digital assets, commonly known as cryptocurrencies or stable coins. The simplified approach improves operational efficiency and liquidity management, streamlines payment reconcliliation and reduce overall transaction costs for the financial institutions.

IBM said it will continue to expand the ecosystem of settlement assets based on client demand

(Travel for this report was sponsored by Money 20/20 Asia)