Cross-border transactions traditonally take up to days to be completed, and require banks to maintain accounts that keep capital trapped.
IBM is spearheading another blockchain project as it uses the technology to enhance international payment efficiency.
Developing countries are being targeted under the cross-border blockchain initiative, as IBM work with the currency exchange service, KlickEx.
Playing an integral role in the process in the blockchain startup, Stellar, providing its own cryptocurrency called Lumens for the new scheme that will be launched across a number of countries.
The current process by which banks conduct cross-border transactions leaves currency trapped in foreign accounts, requiring banks to maintain them constantly.
Banks have shown keen interest the potential for blockchain to revolutionise international transactions and processes, as traditionally these tasks are complex and require days to be completed.
In contrast to the traditional method, IBM’s new cross-border process would allow for international transactions to be completed in near real time. This scheme stands out due to the involvement of a cryptocurrency, marking a major step forward for their use in core financial processes.
Big Blue is undoubtedly a pioneering force in blockchain development, leading the way on the journey to bring distributed ledger technology into use across the industries. IBM was recently found to be the frontrunner in blockchain development, coming ahead of Accenture and Microsoft in findings from Juniper Research.
One example of IBM’s work with blockchain is evident in the partnership it is engaged in with the global shipping giant, Maersk. The duo have been working on a plan to disrupt the complex, lumbering processes still at the core of shipping and logistics, by introducing blockchain. The technology is intended to get the industry on track to going paperless, having a considerable effect on efficiency.
IBM has also partnered with the London Stock Exchange to bring blockchain to small and medium sized businesses (SME), specifically targeting the way securities are issued to them. Traditionally this process involves certificate data and the management of shareholder information. A distributed registry would streamline this system.