IBM Corp. (NYSE: IBM) announced on Monday a new blockchain solution that will speed up the process of cross-border payments.
IBM along with its technology partners, Stellar and KlickEx Group, had joined together in a collaboration for the blockchain. The company's’ purpose is to be able to reduce the settlement time as well as lower the cost of payments between businesses and its consumers.
It will also allow for all parties involved in the transactions will have access and be able to track the clearing and settlement of the currency exchange. Instead of the consumer being in the dark about when the transaction will be finished, they can now see the step by step process.
Blockchains are basically a digital ledger where data is stored into and protected by encrypted “blocks”. The data stored is into many different networks that can only be accessed by those with authorized access, giving data more protection from potential cyber attacks.
“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,” said Bridget van Kralingen, Senior Vice President of IBM Industry Platforms, “Making distributed ledger technologies more interoperable is the latest example of IBM’s leadership driving the rapid advancement of blockchain.”
Current transactions between parties take several days, but are also very prone to errors, and IBM’s blockchain is trying to modify the ongoing issues.
“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."
The blockchain is already being processed in 12 different currency regions across the Pacific Islands and Australia, New Zealand, and the United Kingdom.
IBM will continue to expand upon its blockchain to make advances to support central bank-issued digital currencies, securities, bonds and financial assets.