IBM Announces Blockchain World Wire Payment System Based on Stellar (XLM)

US tech giant IBM has developed a new payments system that relies on blockchain technology. The solution is based on the Stellar network and will compete with the traditional Swift system.

IBM has recently announced the Blockchain World Wire, a new payments system that relies on the Stellar blockchain. The US tech giant is planning to present its system to banking representatives and other parties attending the Sibos conference in Sydney. The event is organized by SWIFT in late October.

IBM’s payments solution aims to offer banks a method to clear and settle cross-border payments within seconds. Thus, Blockchain World Wire might compete with the traditional Swift payment system and Ripple’s blockchain-based xRapid transaction solution.

The new product developed by IBM and Stellar will allow the exchange from fiat currencies to cryptocurrencies like Stellar’s Lumens (XLM).

IBM has launched a webpage explaining the concept behind the Blockchain World Wire. The company says:

“Financial institutions use their existing payment systems - seamlessly connected to World Wire’s APIs - to convert the first fiat currency into the digital asset. World Wire then simultaneously converts the digital asset into the second fiat currency, completing the transaction. All transaction details are recorded onto an immutable blockchain for clearing.”

Retailers noted the new system would be able to streamline the payments processes, reduce costs, and increase efficiency. It will also open the door to new markets and operations, including Open Account trade transactions.

According to IBM, the payments system will use a stablecoin as the bridge asset between two fiat currencies. Thus, two financial institutions will agree on the stablecoin, which will facilitate the trade and define the settlement instructions, and will use their existing payments systems by connecting them to World Wire through APIs.

IBM has previously trialed a stable coin pegged to the US dollar. The coin, named Stronghold, was developed by US-based financial services firm Stronghold and runs on the Stellar network. Users will be able to apply Stronghold in the context of the Blockchain World Wire.