International settlements between banks are slow and costly. This is something that will not surprise anyone. IBM however, does have a nice surprise. Just this week, they shared that their Blockchain World Wire (BWW) project was brought out of its beta phase.
Blockchain World Wire’s genius design uses digital currency on Stellar’s blockchain. This enables Blockchain World Wire to facilitate international settlements between banks in almost real time. IBM and Stellar have shared an interest in international payments since last year.
Blockchain World Wire is using digital assets to settle transactions. This will serve as an agreed-upon store of value exchanged between parties. Additionally, it will also integrate payment instruction messages. The shortest possible definition would be that funds will now be able to be transferred at only a fraction of the time and cost of traditional correspondent banking.
While this move is welcomed for most users and the developing parties, Ripple might have a different view. Ripple’s executives have been quite vocal about blockchain’s involvement with the banking sector.
According to IBM’s analysis, which was posted earlier this year, blockchain could be a revolution in the global financial system. The company however, doesn’t see banks becoming obsolete any time soon.
With the many recent innovations and solutions being implemented in the banking system, it’s safe to say that banking will have an incredibly different look in the coming years. Cryptocurrencies are already reshaping the global financial system. Additionally, with blockchain technology’s many recent innovations transactions are becoming faster and more secure than ever.
This slow, but steady adoption of new technologies can prove vital to the banking system. The strained and outdated international payment system is in dire need of innovations, which could save both time and resources to all parties involved. By the time blockchain technology reaches the state of mass adoption, the banking and payment systems will probably look entirely different.
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