IBM Blockchain World Wire is a Stellar-Powered Near Real-Time Global Payment Solution

Blockchain World Wire: IBM’s Stellar-Powered near Real-Time International Payment Solution

IBM quietly launched the Blockchain World-Wire. According to IBM, it is a new financial rail, which can simultaneously clear and settle cross-border payments in almost real time. This product is intended to become a real competitor to xRapid by Ripple.

The Payment Process

The company even released a step-by-step guide on how this payment solution, powered by the Stellar Protocol, will work. Here are the steps:

  • Two financial institutions agree to utilize a stable coin, central bank digital coin or any other digital asset a bridge between two fiat currencies.
  • The institutions use existing payment systems to connect to the World Wire APIs, which converts the first fiat coins into digital assets.
  • World Wire will then convert the digital assets into the second fiat currency, which will complete the transaction.

All the details of the transaction become recorded on an immutable blockchain for clearing. According to IBM, their payment solution has the following benefits over existing cross-border payment solutions:

  • Faster speeds in payment processing since settlement and clearing is simultaneous
  • Lower costs for cross-border money transactions
  • Increased efficiency since there is a single exchange fee for all fiat currencies
  • Support for payments of any size, of any asset type, for any destination

What to Expect

During the release of this payment solution, IBM did not issue a press release. The Stellar Development foundation did not tweet about this development. It would thus seem that the two organizations are working together, but they are not yet ready for mass launch.

Besides that, in its site, IBM did not provide anything much in technical details. The only revelation was that their payment solution would utilize technology developed by Stellar. Before the launch of Stellar in July 2014, McCaleb, who co-created Stellar, also co-founded Ripple with Chris Larsen in 2012. He even served as the Ripple CTO until 2013.

World Wire is Quite Similar to Ripple's xRapid

On the surface, World Wire appears quite similar to xRapid by Ripple, according to the description given by IBM. However, some differences exist between the two payment solutions. For one, the World Wire payment solution can use any digital coin, unlike xRapid, which only uses XRP as a bridge currency.

This use of multiple coins can be a good thing and a bad thing. The Stellar fans are excited since they believe that Lumens (XLM) will act as the bridge currency for most transactions. However, it also has some Ripple fans worried. They fear that some financial institutions might turn to Blockchain World Wire instead of xRapid by Ripple.

This fear escalates because most of these institutions already have existing relations with IBM, even though the IBM solution seems inferior to the xRapid solution. It is worth noting that the IBM solution is still in the early days of development. However, this potential completion could help push the Ripple team to bring about even more innovation to ensure they remain competitive, which is a good thing for the world.

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