IBM takes its banking customers a step closer to adopting digital currencies. Six international banks were announced on Monday to sign letters of intent to issue stable currencies or digitized currencies backed by conventional currencies on World Wire, an IBM payment network using Pluchen Stellar. The network is designed to allow regulated enterprises to move value across borders – remittances or foreign currencies – more quickly and at lower cost than the old banking system.
So far, three banks have been identified – the Philippine-based RCBC, the Brazilian Banco Brasico and the South Korean bank of Busan – and the rest, which will be identified soon, will provide digital versions of the euro and the Indonesian rupee, pending regulatory approvals and other reviews, IBM said.
In fact, while the currency supported by Stronghold supported by the US dollar currently operates as an aid to the US currency, there are still no payment sites in the United States. In this regard, IBM received a “favorable verbal response” from US regulators, Lund said.
“So we start with markets outside the United States, but it will not be long before adding the US as a run-off point. It will be sometime this year. Said we will get to it, the third quarter or fourth quarter something like “
However, the World Wire platform has payment sites in 72 countries, through 48 currencies and 46 bank endpoints (including banks and money transmitters) where people can send or receive cash, according to IBM.
Apart from its digital currency, this arrangement opens up the possibility for banks to use Stellar’s digital currency, which can be used as a bridge currency when it is difficult to trade a stock for another. Lund also said World Wire could support other digital currencies, but only supported Stellar at the moment because financial institutions are lagging behind currency fluctuations.
Stellar coin performance
World Wire may be the first big release for IBM and Stiller, but Big Blue is quietly working on this for some time, as in the late 2017 beta with a money transfer operator named KlickEx in the South Pacific.
It is part of Lundy’s earlier idea of how IBM will play its role in the future of financial services.
Stellar, set up by the founder of the former Reeble, Jad Mkaylab, made a lot of bold moves under his own power: So what is IBM bringing to the table?
“IBM is calling itself the ‘network operator’, while in fact it is Stellar who sets the standard for the protocol,” Lund said. With regard to IBM’s role, this includes maintaining the payment API and some basic system software that handles accounts and money flow for participants on the network.
IBM also has relationships with most banks on the planet. Lund also pointed out that IBM is “the most trusted auditor in the Stellar public network today,” which means that many other nodes are listening to their contract on which transactions should occur.
New Revenue Model
In addition to pushing Stellar and stable currencies to the lead in many banks and regulators, the IBM division is also exploring a new revenue model with World Wire. This may be a smart strategy because putting pressure on institutional players to show the potential for ROI is at least clear.
In line with this, the World Wire Network is free to join. Lund said the participants paid according to the value of the network. This is how the company maintains its revenue to support the network and therefore this method alone is a completely new way to engage the financial services sector that IBM has not done before.
Lund pointed out that the total figures for global payments are very spectacular, amounting to hundreds of billions of dollars a year that are traded across borders. As such, IBM intends to measure funds and impose a very modest amount of basis points on the value flowing through the network.