IBM and RIPPLE must now fight to the death!
IBM is taking banking one step closer to crypto.
As of today, IBM has announced 6 international banks that have signed letters of intent to issue stablecoins. The cryptocurrency will be issued on World Wire, IBM’s payment network on Stellar’s (XLM) blockchain. The network promises to let regulated institutions move remittances or foreign exchanges across borders faster and cheaper than current methods.
Right now we are aware of 3 out of 6 banks; Philippines-based RCBC, Brazil’s Banco Bradesco, and Bank Busan of South Korea. The other remaining banks will offer digital versions of the euro and Indonesian rupiah “pending regulatory approvals and other reviews,” IBM stated.
Currently, World Wire will be using Stronghold USD stablecoin as their U.S. dollar-backed token. In the future, the arrangement opens up the possibility of banks using Stellar lumens, the native token of the Stellar blockchain. It can be used as a “bridge currency” in a scenario where it becomes difficult to trade on fiat to another. World Wire has the capacity to “support other cryptos” but it is restricted to lumens for now due to the volatility of cryptocurrency, said Jesse Lund, IBM’s head of blockchain for financial services.
Mr. Lund also stated;
“As more stablecoins come on board, the whole notion of FX changes over time. We are working very hard to expand the ecosystem of stablecoins that will include many more banks and many more fiat currencies – so digital representations of fiat currencies – and even, eventually, central bank issued digital currencies.”
World Wire is free to join; participants pay according to the value they move through the network, said Lund. “That’s how we maintain our revenue for supporting the network and so that alone is an entirely new way of engaging the financial services industry that IBM has never done before.”
IBM is integrating a pay-as-you-go model, much like PayPal. This model seems to become increasingly attractive because there are no monthly fees or cost to a consumer, just a fee when they use the service.
Based on the list of banks provided, you can probably tell World Wire is not yet launched in the U.S. the company has decided to work in foreign countries.
According to Lund;
“So we are starting with markets that are outside of the U.S., but it won’t be long before we add the U.S. as an operating endpoint. It will be sometime this year; we will get to it, third quarter, fourth quarter something like that”.
IBM has received “a favorable verbal response” from U.S. regulators, stated Lund.
According to IBM, World Wire platform has payment locations in 72 countries, with 48 currencies and 46 “banking endpoints” where people can send or receive cash.
It looks like IBM is cutting in close to Ripple XRP when it comes to transferring fiat. The platforms have their differences but one thing is for sure, these platforms are likely to replace Swift- current banking wire transfer system- in the times ahead.