Services like TransferWire, American Express or Western Union Money Transfer are rather good for savvy customers, but not suitable for small businesses which can not afford the huge transaction costs.
IBM has announced a new blockchain banking solution that will help financial institutions address the processes of universal cross-border payments, created to reduce the settlement time and lower the cost of completing global payments for businesses and consumers.
Global banking leaders - including Bank Danamon Indonesia, Bank Madiri, Bank Negra Indonesia, Bank Permata, Bank Rakyat Indonesia, Mizuho Financial Group, National Australia Bank, TD Bank, Wizdraw (HK) of WorldCom Finance, and other financial institutions - are collaborating and advising in the development of the solution in order to help expand its use in other regions around the world.
A spokesman for IBM said: "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 Blockchain solution is highly secure and can reduce the transaction costs associated with such cross-border payments and also provides the flexibility and transparency to banks. By the early next year in the South Pacific's retail foreign exchange corridors, it will apparently process up to 60% of all cross-border payments.
The technology giant revealed that it and Dream Payments are rolling out Dream Payments Cloud to USA financial institutions, which is described as a scalable platform that enables financial institutions to provide business customers with secure mobile and digital payment services that help them go to market faster and improve customer experiences.
The blockchain network contains 12 currency corridors that cover New Zealand, Austalia, Fiji, and Tonga. In the future, this IBM universal blockchain payment solution is positioned to support central bank-issued digital currencies, securities, bonds, and structured financial assets. And blockchain will be used to record the whole thing from the farmer's collateral to letters of credit to pay. "Making distributed ledger technologies more interoperable is the latest example of IBM's leadership driving the rapid advancement of blockchain".
Under the latest blockchain system, banks will make the transactions using digital currency Lumens and then depend on the local market makers for the conversation of Lumens into local fiat currency.