Blockchain solution for cross-border payments

IBM has announced a new blockchain banking solution which it says will speed up and lower the cost of making cross-border payments. In a statement issued yesterday (16 October), IBM said that the solution is already processing live transactions in 12 currency corridors across the Pacific Islands and Australia, New Zealand and the United Kingdom.

The company explained what this could mean in practice: “For example, in the future, the new IBM network could make it possible for a farmer in Samoa to enter into a trade contract with a buyer in Indonesia. The blockchain would be used to record the terms of the contract, manage trade documentation, allow the farmer to put up collateral, obtain letters of credit, and finalize transaction terms with immediate payment, conducting global trade with transparency and relative ease.”

IBM is working with technology partners Stellar.org and KlickEx.

Jed McCaleb, co-founder of Stellar, commented: “Currently, cross-border payments tend to take up to several days to clear. This new implementation is poised to start a profound change in the South Pacific nations, and once fully scaled by IBM and its banking partners, it could potentially change the way money is moved around the world, helping to improve existing international transactions and advancing financial inclusion in developing nations.”