IBM and Stellar Announce Blockchain Banking Project - Stellar’s Lumens Jumps 160%
According to an announcement, IBM and Stellar will develop a banking blockchain-based project to support money transfers in South Pacific region. Temporarily, the platform will use Lumens (XLM), which have gone up by 160% since the news.
IBM announced today that it would work with a network of banks to support fast money transactions throughout the South Pacific region with the help of a cryptocurrency and a blockchain-based platform. In the first stage of the project, the network will consider Stellar’s Lumens (XLM) as a base currency.
IBM promises a platform where both consumers and merchants will transfer money in almost real-time, which was not possible until the emergence of blockchain technology.
The whole network covers twelve forex channels in the South Pacific region, including Australia, New Zealand, Fiji, and Tonga. By the first quarter or 2018, these banks should process up to 60% of all cross-border transactions in the whole region.
Payments under this new project will be backed by a cryptocurrency called Lumens (XLM), which was developed by Stellar. The latter is a company founded by Jed McCaleb, a prominent personality in the cryptocurrency industry, and also the creator of Ripple – one of the top five cryptocurrencies by market capitalization.
Today, cross-border payments are conducted by holding foreign accounts in domestic currency (known as Nostro accounts), after which a process of account debiting is executed based on the needs. At times the whole operation may take several days.
Under the conditions of this new blockchain-based project, banks will make payments using Lumens, and then convert these to fiat money based on the current quotations from market makers.
A few hours after the announcement, Lumens’ price rose 164% to $0.0458, and the dynamic keeps bullish. This is the sharpest growth since April 2017. At the moment, the total market cap of XLM is $759 million.
Jesse Lund, Vice President of Blockchain Technologies at IBM, said in an interview with Fortune:
“This is the next step in the evolution of blockchain technology. It’s live money moving around a network.”
Both IBM and Stellar participate in a project known as Hyperledger Fabric, which creates blockchain solutions focused on payment systems.
IBM is not the only company to offer blockchain-based projects for payment solutions. BitPesa and TransferWise have similar goals. BitPesa focuses on Bitcoin to help African merchants, which are part of a growing marketplace within the continent, switch to faster payments.