IBM and Stellar Partner in Introducing Blockchain-based Payments Technology in the South Pacific Region
Technology firm IBM and a network of banks partner with nonprofit company Stellar in launching a digital currency and a Blockchain software for cross-border payments in the South Pacific region.
The banking network is due to process as much as 60% of all transactions using the Blockchain-based payments in the region’s retail foreign exchange sector by early 2018.
In its recent announcement, IBM said that both merchants and consumers will be able to transfer money to another country within the region in near real-time, thus, expediting a payments process that usually takes days to complete. As an example, the company claimed that a farmer in Samoa can now sign a contract with a buyer in Indonesia and utilize the technology to maintain a record of the entire process from the farmer’s collateral, letters of credit, and payments.
According to IBM’s vice president (VP) of Blockchain, Jesse Lund, the project marks the next phase in the evolution of Blockchain.
“This is the next step in the evolution of Blockchain technology. It’s live money moving around a network.”
Under the Blockchain arrangement, the banks will use Stellar’s cryptocurrency Lumens in conducting the cross-border payments. The banks then rely on domestic market players for the conversion of Lumens into local fiat currencies.
Lund, however, claimed that the use of Lumens could be just temporary as the central banks of different countries are expected to begin issuing their own virtual currencies in 2018. These currencies will become an integral part of Blockchain-based money transfer transactions.
Moreover, the project comes amidst the various efforts by companies to create new solutions to increase the efficiency of global money transfer transactions. These initiatives show that Blockchain technology is slowly but surely entering the mainstream financial markets around the world.