IBM and Stellar launched a program to ease banking and solve speed limitation.
Global banking has proved to be better than other companies in assimilating cryptocurrency and blockchain. Although, Bitcoin would seem a likely prospect but for the doggedly slow transaction speeds, therefore a newer, more efficient and more decentralized coin will be more appropriate.
As a means of solving the speed limitation, IBM launched a program allowing consumers and merchants in the South Pacific region, through traditional banking partners, to transact across borders but with the speed and effectiveness of the Stellar blockchain.
Why Did IBM Choose Stellar?
IBM chose Stellar because of a few basic qualities. Jo Lang of IBM Blockchain Financial Solutions, states that “Bitcoin would have been a non-starter. But, our clients are not in China where it is primarily mined.”
IBM found its desired combination in Stellar. This was in terms of non-profit status coupled with an open source codebase, and the technology to work with a well-developed software API.
Additionally, Stellar supports any access type on the network and can scale which provides the foundation for future advancement across the South Pacific.
IBM’s Stronghold USD
Another reason why IBM is launching the World Wire service with Stellar is that Stronghold USD, a stablecoin it created ranked to the value of the U.S. dollar, is operating on the Stellar blockchain platform.
Stronghold USD founder and Chief Executive, Tammy Camp, said: “The token lets the public do payments, foreign exchange between companies in a very free and more secure way.”
IBM plans to use Stronghold USDs on the World Wire payment system considering that the currency is designed for asset transfers between businesses and multinational corporations.
Moving capital internationally is usually costly and wastes time. It is expensive for banks, who must conserve currency reserves for each country they’re banking with, and it is high for consumers because of transaction speed and connected fees.
Under IBM’s payment program, called the IBM Blockchain World Wire, the native cryptocurrency banks, Lumens (XLM) on the Stellar blockchain, will be used to carry out transfers from country to country.
The IBM World Wire will provide users near real-time payment settling across countries cheaply without the stress of maintaining a host of foreign currencies.