IBM Blockchain Head Takes Stab at Ripple’s xRapid by Comparing IBM World Wire’s Real-Time Open Approach
IBM’s Blockchain World Wire was unveiled earlier this year, which the tech giants describe as ‘the new financial rail that simultaneously clears and settles cross-border payments in near real-time.’
World Wire uses the Stellar protocol which makes it possible for financial institutions to clear and settle cross-border payments in seconds. When a couple of financial institutions agree to use stable coins or other virtual currencies for transactions, World-Wire can be used.
The institutions use their already prevalent payment systems which are seamlessly combined with World Wire’s APIs to convert the first fiat currency into the digital asset. World Wire then simultaneously changes the digital asset into the second fiat currency, completing the transaction. All transaction details are recorded onto an immutable blockchain for reference.
“World Wire’s novelty in the blockchain space regarding settlements is that payment messaging and instructions for settlements can happen in real-time. Hence driving all sorts of efficiencies into the process mainly because you’re doing things on one network, i.e. reconciling information and post fact isn’t necessary.”
Contrary to IBM xRapid uses XRP to provide liquidity to complete these cross-border transactions. This, in essence, is similar to moving currency. Although Lund acknowledged that Ripple indeed has come up with an innovative design but Word Wide takes a more of an open approach in picking virtual currencies.These act as tools for payment settlements. World Wide is using IBM’s reputation to get expertise and connection with global central banks to create alternative payment instruments.
“Unlike, Ripple’s xRapid, World Wire will allow a whole range of digital asset instruments for future swaps.”
As SWIFT’s GPI pretty much just gives instructions to banks which are executed on a “deferred net basis”, Lund dismisses this solution to not be “settlement at all.”
Currently, digital UD and Euros are available on World Wire but the company is using Lumens as the local asset for the underlying interface.