IBM introduces new blockchain banking solution for financial institutions

Ivan Schwartz
October 18, 2017

The computing giant has teamed up with blockchain startup Stellar and payment company Kickex to launch a cross-border payment system for banks which uses the blockchain to "reduce the settlement time and lower the cost of completing global payments for businesses and consumers". Services like TransferWire, American Express or Western Union Money Transfer are rather good for savvy customers, but not suitable for small businesses which can not afford the huge transaction costs.

With payment technology's development, an American MNC IBM and a network of banks have started utilizing digital currency and blockchain software to initialize the blockchain banking across multiple countries.

Several worldwide banks have already partnered with IBM for this solution which includes Wizdraw (KH) of WorldCom Finance, TD Bank, Rizal Commercial Banking Corp. of Philippines, National Australia Bank, Bank Rakayat Indonesia, Mizuho Financial Group, Banco Bilbao Vizcaya Argentaria, Kasikornbank Thailand, Bank Negara Indonesia, Danamon Indonesia, Sumitomo Mitsui Financial Group and several others. The solution is meant to improve the speed in which banks both clear and settle payment transactions on a single network in near real time.

The solutions is run from IBM's open source Blockchain Platform on Hyperledger Fabric.

The cross-border payments network was announced at Sibos in Toronto which includes "12 currency corridors" that covers Australia, New Zealand, UK and smaller countries like Tonga and Fiji.

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The solution isn't just limited to the physical payments, either.

IBM industry platforms senior vice president Bridget van Kralingen said: "With the guidance of some of the world's leading financial institutions, IBM is working to explore new ways to make payment networks more efficient and transparent so that banking can happen in real-time, even in the most remote parts of the world". Initially, Stellar will provide the network and digital asset to facilitate settlements for cleared transactions.

IBM has also partnered with Walmart, Kroger, Nestle and others to improve the food safety by using Blockchain technology which can help to enhance traceability and transparency.

Blockchain, the technology behind bitcoin, is a revolutionary distributed-ledger technology that offers a secure and immediate way of transferring a range of data - more specifically, in this case, currency transactions.

According to IBM, global banking leaders and financial institutions are participating in the network to expand its use.

Other reports by GizPress

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