When you think of IBM, chances are you probably think of Stellar? It’s common knowledge that IBM are working with Stellar to integrate themselves into the blockchain industry. The IBM blockchain is one that is sure to be influenced by the Stellar ecosystem and the two firms are now working hand in hand to make blockchain more accessible.
Within IBM’s latest announcement ‘IBM Blockchain World Wire’ the status of Stellar has once again been confirmed. World Wire is a system designed for cross border payments, and the Stellar protocol is playing a very significant role within this.
What is World Wire?
According to IBM:
“The concept of money is 2,000 years old. The world has been using the same network to process financial transactions for 50 years. And even though globalization has changed the world, payment fees and other financial barriers remain the same. But now there’s a new way to move money. Introducing IBM Blockchain World Wire, the new financial rail that can simultaneously clear and settle cross-border payments in near real-time. Integrating with your existing payment systems, you can replace costly opacity with affordable transparency – and that can bring greater financial opportunity to all.”
And how does it work?
“Using blockchain technology and the Stellar protocol, IBM Blockchain World Wire makes it possible for financial institutions to clear and settle cross-border payments in seconds. The institutions use their existing payment systems – seamlessly connected to World Wire’s APIs – to convert the first fiat currency into the digital asset.”
“Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other digital asset as the bridge asset between any two fiat currencies. The digital asset facilitates the trade and supplies important settlement instructions. World Wire then simultaneously converts the digital asset into the second fiat currency, completing the transaction. All transaction details are recorded onto an immutable blockchain for clearing.”
It’s very significant that the Stellar protocol has been name dropped as a big part of this. It’s big news for Stellar, and it’s going to set the project up for a very prosperous future indeed.
What does World Wire aim to achieve?
As a blockchain project, it’s clear from the outset that World Wire has been designed to be fast, efficient and cheap to run. IBM want to allow for fast payment settlement alongside simultaneous clearing. World Wire will also reduce the time taken to settle disputes and other issues that could arise within some transactions.
A key part of this project is that one exchange fee will be set for all currency exchanges. Therefore no matter which way you are converting your money through transactions, the fee is a fixed, flat and cheap fee, allowing for a more efficient platform and most importantly, utter transparency.
World Wire is secure. It’s simple to use and its able to handle a range of different assets.
All of this is possible, only because of the technology driving Stellar.
Who is using World Wire?
This is the important question. Naturally, this is a project designed to help businesses and institutions. Therefore, it’s safe to say that this is going to attract some big institutional interest within the Stellar project. Could this have further implications for Stellar XLM and could it inspire some new institutional investment, possibly so, but it is important at this point to note that XLM is separate from this. Though World Wire is using the Stellar protocol, it’s not directly associated with XLM, the native Stellar cryptocurrency, as such.
According to IBM:
“Our convening power brings together incumbents and FinTechs, ensuring collaborative innovation with data security, compliance and consumer focus. We work with you to ensure that IBM Blockchain World Wire is compatible with your existing payment systems, making it as seamless to adopt as possible. Our cross-sector relationships and technical expertise are creating systemic change, helping you reach new customers and enter new markets. Backed by the right experts, access and our collaborative approach, we’re building and running scalable, industry-shaping blockchain networks.”
Simply put, World Wire is a project designed to empower Financial tech firms, on a global scale.
It’s a very exciting time to be a part of the Stellar family. As mentioned, this is not a direct adoption of Stellar XLM, however going forward it provides a very promising outlook for Stellar and indeed for IBM, a company that is slowly becoming less of a tech giant, and more of a world leader for the future of blockchain adoption.