IBM Corp. has entered a new partnership that will see Big Blue offer a cross-border blockchain payments solution aimed at business and consumers.

The new payments network, which will be formally announced at the Sibos conference in Toronto on Monday, involves the use of the Stellar network, a free, open-source network developed by the Stellar Development Foundation with support from banking payments infrastructure firm KlickEx Group.

The platform employs Stellar’s Lumens cryptocurrency to facilitate cross-border transactions in multiple fiat currency pairs and is already in operation processing live transactions in 12 “currency corridors” across the Pacific Islands and Australia, New Zealand and the United Kingdom.

“Using a blockchain distributed ledger, all appropriate parties have access and insight into the clearing and settlement of financial transactions,” KlickEx said in a statement. “It is designed to augment financial flows worldwide, for all payment types and values, and allows financial institutions to choose the settlement network of their choice for the exchange of central bank-issued digital assets.”

The IBM platform could make it possible, for example, for a farmer in Samoa to enter into a trade contract with a buyer in Indonesia. The blockchain would record the contract, manage its documentation, handle financial aspects such as collateral and letters of credit, but last, and complete the transaction with immediate payment despite both parties operating in different currencies.

Suggesting that banks are keen to get on board, particularly given that the service replaces the need to use Swift to make cross-border transactions, IBM has signed up a range of financial institutions from across the Asia-Pacific region. They include Banco Bilbao Vizcaya Argentaria, Bank Danamon Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Kasikornbank Thailand, Mizuho Financial Group, National Australia Bank, Rizal Commercial Banking Corp. Philippines, Sumitomo Mitsui Financial Group, TD Bank and Wizdraw (HK) of WorldCom Finance.

“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,” a spokesperson for IBM told IBT.

The full timeline for the expansion of the platform into new markets wasn’t immediately clear, but it would appear that IBM and its partners are keen on seeing the platform expand globally. That’s for very good reason: Not only is it very quick in transferring money across borders, its use of blockchain tech also delivers guaranteed transparency and safety into cross-border financial transactions that involve banks, something that has been lacking in quality.

Photo: Rosemaryetoufee/Wikimedia Commons