IBM's near-real-time, cross-border payments system is now live, according to reports in CryptoCoinSpy.
The publication said Thursday (Aug. 30) that IBM Blockchain World Wire, the technology conglomerate's new financial rail, has launched in partnership with blockchain company Stellar. Stellar provided a protocol for the payments system that promises simultaneous payment settlement and clearing for faster cross-border transactions.
World Wire deploys a central bank digital currency or other digital asset to bridge between two fait currencies. A set of APIs enable financial institutions to use existing payment systems to convert the first fiat currency into a digital asset; World Wire then converts that digital asset into the second fiat currency.
Transaction data is then stored onto a blockchain for clearing, IBM explains on its website.
"Sending money across borders today requires a series of intermediaries for both clearing and settlement, each adding time and cost to the process," IBM explains in its infographic report. "With IBM Blockchain World Wire, clearing and settlement with finality happens in near real time."
The company says its solution can reduce costs of cross-border transactions for both consumers and businesses.
Last year, IBM Head of Blockchain Solutions, Financial Services Jesse Lund spoke with PYMNTS' Karen Webster about the company's work with Stellar and its vision for blockchain in payments. In October, IBM first announced its collaboration with Stellar and KlickEx to develop a blockchain-based network for banks.
At the time, Lund offered the example of a transaction between farmer and business buyer, in which "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."
Lund also said that as the project expands and launches, banks will be its guiding force.