IBM develops cheap blockchain cross border payment solution

IT giant IBM has announced a new blockchain based banking solution that it says could speed up and lower the costs of making cross-border payments.

IBM released a statement earlier this week where it said the solution it has developed is already processing live transactions in 12 currency corridors across the Pacific Islands, Australia, New Zealand and the UK.

The IT firm explained what this could mean in practice: “For example, in the future, the new IBM network could make it possible for a farmer in Samoa to enter into a trade contract with a buyer in Indonesia. The blockchain would be used to record the terms of the contract, manage trade documentation, allow the farmer to put up collateral, obtain letters of credit, and finalize transaction terms with immediate payment, conducting global trade with transparency and relative ease.”

IBM is working with technology partners and KlickEx.

Jed McCaleb, co-founder of Stellar, commented: “Currently, cross-border payments tend to take up to several days to clear. This new implementation is poised to start a profound change in the South Pacific nations, and once fully scaled by IBM and its banking partners, 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.”

Similar systems exist inside certain countries around the world, and have effectively marginalised banks. If it can be used to compete with existing systems (without huge fees) then there is a real potential for world trade and e-commerce to be changed forever.

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