The Blockchain World Wire (BWW) is an initiative in development by the International Business Machine (IBM) for the clearing and settlement of cross-border payments. The blockchain will integrate with existing payment systems for ease whilst utilising the Stellar protocol to power the cross-border payment settlement in seconds.
The financial institutions are required to select either a stablecoin, central bank digital currency or another digital asset as the intermediary between the two fiat currencies. Blockchain World Wire’s API will use the sending currency to buy crypto for the intermediary transaction to then convert to the receiving currency. Buying Bitcoin to settle the cross-border transaction may not be as effective because the price of the asset is subject to change during the process.
IBM have recommended using a stablecoin to protect users from any price fluctuations during the transaction. Stronghold USD is a stablecoin scheduled to launch on the Stellar protocol that could be utilised for such a transaction. It would work in a similar way as the API will buy cryptocurrency and then the fiat will provide settlement instructions when received.
BWW is revolutionising cross-border payments with simultaneous clearing and settlement whilst eliminating the need for multiple parties to process transactions. The system will save businesses expenses with faster payment processing, lower costs, increased efficiency and more.
According to McKinsey’s Global Payment Map data, the payments industry is expected to grow annually at an average rate of 7% potentially becoming a $2 trillion industry by 2020. The payments industry is a huge market that could benefit exponentially from blockchain technology and innovation.
To assure you keep up to date with the latest news in crypto or to buy cryptocurrency, head over to BC Bitcoin.