IBM launched the network at the Money 20/20 Asian conference and said it was the first blockchain network of its kind to integrate payment messaging, clearing and settlement on a single network.
The network uses the Stellar protocol to enable financial institutions to optimize and accelerate foreign exchange transactions, cross-border payments and remittances.
Using the Stellar protocol, World Wire performs point-to-point transfers instead of conventional banking, thereby reducing intermediaries and is available in seconds by transmitting monetary value in the form of cryptocurrencies.
Jesse Lund, IBM’s head of blockchain and digital currencies, launched the network and said it was designed to ease friction in the financial landscape.
“We believe this is a radical reinvention of payments for the 21st century.
“This is a complete overhaul of the way money moves today, that is, the correspondent banking system, where messaging happens on one network and settlement on another” , he declared.
The real advantage of World Wire is that it brings it all together on one network, Mr. Lund said.
“The real novelty is that payment data and real monetary value move together as a sequence of operations in a transaction on a single network,” he said.
Mr Lund said financial institutions were urged to come together to solve the payments problem in the interest of the end customer.
“The idea is that the network allows financial institutions to come together to discover each other, trust each other and transact by moving money across borders and currencies in real time,” he said .
Lund said IBM chose to partner with Stellar because they offered the right benefits in terms of scalability and digitalization.
“We chose the Stellar protocol as the basis for World Wire for a number of reasons, the scalability in terms of transaction numbers but also the ease with which Stellar went about digitizing real-world assets.
“World Wire is focused on currencies and real-time clearing and settlement and the Stellar protocol makes it so easy to represent something of real value in a digital token which was the right protocol for us,” he said .
Stellar co-founder and chief technology officer Jed McCaleb said what had held back innovation in the payments landscape was a lack of cohesion.
“Everyone we talk to wants a network to exist, but everyone expects everyone else to join in at the same time, so you have to get them all involved at the same time,” he said.
Mr McCaleb said adoption of the network would facilitate payment transactions across the world and simply required a will.
“What we’re trying to do is create a common standard that everyone can adopt and we hope everyone does, because it will reduce friction around the world,” he said.
