In what can be termed as one of the biggest collaboration in the world of global finance, IBM has joined hands with payments network ‘KlickEx’ and blockchain startup ‘Stellar’ to work together on a new project for “cross-border payments solution.”
Many analysts and financial stalwarts across the globe have come forward in support of the blockchain technology which is said to bring a new revolution in the way global transactions take place. The new project between these three companies is aimed at developing a cross-border blockchain-based payments solution which will give a boost to global transactions by increasing the transaction speeds and considerably reducing the transaction costs.
Such a solution is aimed at solving the existing anomalies like inefficiencies and delays caused by the existing methods, slow processing speeds, high processing fees, inefficient capital utilisation and error-prone transactions.
The early stage of this platform is designed to handle up to seven different fiat currencies in the South Pacific in addition to handling New Zealand Dollar, Australian Dollar and the Tonga pa’anga. This solution will be a first-of-its-kind use-case of collaborating the private and public blockchain technology “being used in production to facilitate cross-border payments in multiple integrated currency corridors.”
In order to further this initiative, IBM is said to have been convening with a group of big and reputed banking partners. This would pretty much serve in attaining IBM’s mission to integrate big financial institutions and create a blockchain ecosystem.
IBM’s vice-president of global blockchain development, Jesse Lund said: “Our long game is to support multiple different types of digital assets, and I’m very confident that you will be seeing central banks coming forward with their own digital asset issuances that will be a much more formidable construct of this model.”
In this new project, IBM’s blockchain solution will be responsible for handling the workflow designed around the transaction clearing while Stellar’s blockchain will be looking after the actual settlement process. It is much like a hand-over process.
In a recent blog post, Stellar co-founder Jed McCaleb said “Currently, cross-border payments take up to several days to clear. This new implementation is poised to affect a profound change in the South Pacific region, and once fully scaled by IBM and its banking partners, could potentially change the way money is moved around the world, helping to improve existing international transactions and advancing financial inclusion in developing nations.”
Such a move is a big win for Stellar and it will position the startup as a significant contributor in the global financial framework of reputed and legacy institutions. Currently, this solution is still in the early-stage of development and will slowly advance towards achieving higher goals.
KlickEx CEO, Robert Bell said that it will be too early to comment anything about the transaction volume this solution can handle. However, giving a rough estimate, he said that it will be enough to handle more than 60 percent of the cross-border retail market transaction within the region, once all seven countries are being added.