Following a rather minor mention in September last year, computer giant IBM has now officially launched its “World Wire” international remittance service, built on the Stellar blockchain.
The new service utilizes blockchain technology to make instant cross-border cash transfers possible at almost no cost. Currently, the service is in “limited production” but IBM promises it will be rolled out to more countries in the near future.
IBM’s World Wire was developed in collaboration with the team at The Stellar Foundation and uses the Stellar Lumens (XLM) token as an intermediary store of value. Through the use of smart contracts built on blockchain technology, payments can be made between two countries in almost real time. Smart contracts remove the need for expensive third-party institutions which are traditionally required to validate transactions and slow down the process excessively.
Advantages of Blockchain
The use of blockchain technology not only speeds up the process but costs almost nothing to operate and is more secure and reliable than human-verified methods. All transactions are automatically recorded on the blockchain and are both transparent and incorruptible.
To date there are 72 countries which have been enabled on the IBM Blockchain World Wide system, supporting 47 currencies and 44 banking endpoints. Furthermore, several banks around the world have shown interest in developing digital “stablecoin” versions of their currencies to be included on the platform. Stablecoins are digital versions of real currency that cannot fluctuate in value as they remain pegged at an equal 1:1 rate of the base currency.
“By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide,” said Marie Wieck, General Manager at IBM Blockchain.
A Competitive Market
The new service faces competition from Stellar rival Ripple, which has developed its own instant cross-border payment service – xRapid. The system also went live recently, facilitating a private customer with the payment of a honeymoon in the Philippines. However, IBM believes it’s system differs as it’s not built around a specific cryptocurrency like XRP, which Ripple relies upon.
Stellar’s XLM digital asset enjoyed some decent growth when the news was announced yesterday, gaining 10 percent within a few hours before correcting slightly. XLM is currently trading at $0.112, up 4.8 percent in the past 24 hours.