IBM has announced a new block chain banking solution that will help financial institutions address the processes of universal cross-border payments, designed to reduce the settlement time and lower the cost of completing global payments for businesses and consumers. At present, making international payments can be costly, labourious and error-prone.
Transactions in different currencies can require multiple intermediaries and take days or weeks to complete. According to the World Bank, initiatives to modernize payments and provide financial access could improve the flow of currency and commerce, and help achieve the goal of extending financial services to one billion people by 2020. Working in collabouration with technology partners Stellar.org and KlickEx Group, the innovative solution is intended to improve the speed in which banks both clear and settle payment transactions on a single network in near real time. “This is the first time anyone has made blockchain work at an institutionally viable scale,” said Robert Bell, Chairman of Advanced Pacific Financial Infrastructure for Inclusion (APFII) and founder of KlickEx Group.
The system, which uses a block chain distributed ledger to give all parties access and insight into the clearing and settlement of financial transactions, is designed to augment financial flows worldwide, at the same time as allowing financial institutions to choose the settlement network of their choice for the exchange of central bank-issued digital assets. «With the guidance of some of the world›s leading financial institutions, IBM is working to explore new ways to make payment networks more efficient and transparent so that banking can happen in real-time, even in the most remote parts of the world. “It could potentially change the way money is moved around the world, helping to improve existing international transactions and advancing financial inclusion in developing nations.” Said Bridget Von Krolingen, Senior Vice-President for industry flatfors at IBM.