TORONTO, Oct. 16, 2017 /CNW/ -- SIBOS: IBM
(NYSE: IBM) today announced a new blockchain banking solution
that will help financial institutions address the processes of
universal cross-border payments, designed to reduce the settlement
time and lower the cost of completing global payments for
businesses and consumers. Using IBM Blockchain, and in
collaboration with technology partners Stellar.org and KlickEx
Group, the solution is intended to improve the speed in which banks
both clear and settle payment transactions on a single network in
near real time.
Today, making international payments can be costly, laborious
and error-prone. Transactions in different currencies can require
multiple intermediaries and take days or weeks to complete.
According to the World Bank, initiatives to modernize payments and
provide financial access could improve the flow of currency and
commerce, and help achieve the goal of extending financial services
to one billion people by 2020*.
The solution is already 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. 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.
For example, in the future, the new IBM network could make it
possible for a farmer in Samoa to
enter into a trade contract with a buyer in Indonesia. The blockchain would be used to
record the terms of the contract, manage trade documentation, allow
the farmer to put up collateral, obtain letters of credit, and
finalize transaction terms with immediate payment, conducting
global trade with transparency and relative ease.
IBM has convened an initial group of diverse banking leaders as
part of the development and deployment process, including 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. (RCBC) Philippines, Sumitomo Mitsui Financial Group,
TD Bank, Wizdraw (HK) of WorldCom Finance, and other financial
institutions.
"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," said
Bridget van Kralingen, Senior Vice
President of IBM Industry Platforms. "Making distributed ledger
technologies more interoperable is the latest example of IBM's
leadership driving the rapid advancement of blockchain."
"TD Bank is pleased to participate along with fellow banking
leaders to observe how IBM Blockchain can support more secure and
effective payments solutions," said Rizwan
Khalfan, EVP and Chief Digital and Payments Officer, TD
Bank. "We're focused on innovation that adds value for our
customers and our business, and blockchain presents a tremendous
opportunity to transform and enhance payment systems, enabling us
to continue to evolve the products and services we can offer."
In keeping with IBM's commitment to open source, the solution is
run from the IBM Blockchain Platform on Hyperledger Fabric and was
built in collaboration with Stellar.org, a non-profit organization
and associate member of Hyperledger, and KlickEx Group, a regional
financial services company in the Pacific region. Stellar is an
open-source blockchain network that is purpose-built for the
issuance and exchange of digital assets. Digital assets are issued
on the Stellar network as a foreign exchange bridge to allow for
near real time settlement. KlickEx Group serves as the founding
financial institution for the region, servicing banks, retail
clients and consumers using this new network.
IBM will continue to advance the solution with the goal of
expanding capabilities in order to support central bank-issued
digital currencies, securities, bonds and structured financial
assets. IBM Blockchain provides high performance orchestration to
move payments among parties. Each payment is immutable once
recorded, and settlement instructions are provided via smart
contracts on Hyperledger Fabric. Initially,
Stellar will provide the network and digital asset to
facilitate the settlement of transactions cleared on
Hyperledger.
"This new innovation and collaboration represents a significant
milestone for Stellar as well as the financial technology industry
as a whole," said Jed McCaleb,
co-founder of Stellar. "We are using blockchain technology in
production to facilitate cross-border payments in multiple
integrated currency corridors. Currently, cross-border payments
tend to take up to several days to clear. This new implementation
is poised to start a profound change in the South Pacific nations,
and once fully scaled by IBM and its banking partners, it could
potentially change the way money is moved around the world, helping
to improve existing international transactions and advancing
financial inclusion in developing nations."
The network is currently in use by Advanced Pacific
Financial Infrastructure for Inclusion (APFII) members, a
public-private partnership initially funded by the United Nations
and SWIFT. It is expected to process up to 60 percent of all
cross-border payments in the South Pacific's retail foreign
exchange corridors including Australia, New
Zealand, Fiji, Samoa and Tonga by early next year. Commercial banks
such as 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. (RCBC) Philippines, Sumitomo Mitsui Financial Group,
TD Bank, and Wizdraw (HK) of WorldCom Finance will be invited to
join the network and help it expand in different parts of the world
beginning in 2018.
"This is the first time anyone has made blockchain work at an
institutionally viable scale," said Robert
Bell, Chairman of APFII and founder of KlickEx Group.
"Through KlickEx, the Pacific has had relatively low-cost,
real-time, multi-currency payments for most of the past decade, and
this project was a natural next step following our work to create
seamless and borderless payments across the Pacific. We look
forward to the results with using IBM Blockchain as we continue to
push forward with our mission to remove payment friction across
borders."
This production blockchain network with KlickEx and Stellar is
one of many blockchain projects underway by IBM in financial
services including foreign exchange payments netting, private
equity administration, securities lending and trade finance.
About IBM
IBM is the leader in open-source blockchain solutions built for the
enterprise. As an early member of Hyperledger, an open source
collaborative effort created to advance cross-industry blockchain
technologies, IBM is dedicated to supporting the development of
openly-governed blockchains. IBM has worked with more than 400
clients across financial services, supply chains, IoT, risk
management, digital rights management and healthcare to implement
blockchain applications. For more information about IBM Blockchain,
visit https://www.ibm.com/blockchain/
About KlickEx
KlickEx.co is an award winning regional cross-border payments
system delivering financial infrastructure for emerging markets. It
has been responsible for dramatic uptake in digital financial
services in unbanked regions of the world, and lowering costs for
banks, central banks and consumers in low liquidity currencies.
KlickEx is also a regional compliance system, active in reducing
compliance costs for countries linked to the system. KlickEx owns
many of the Pacific's largest Money Transfer Operations, and is the
region's largest clearing hub, accounting for over 60% of annual
retail foreign exchange transactions (by value and volume) in key
corridors. Its key presence is in the Pacific and Europe, and it is a founding member
of www.APFII.org processing more than 775,000
transactions per second, per billion of population.
About Stellar.org
Stellar.org is a Silicon Valley based nonprofit organization
that supports the Stellar network, a free, open-source network that
connects diverse financial systems and lets anyone build low-cost
financial services—payments, savings, loans, insurance—for their
community. The Stellar network enables money to move directly
between people, companies and financial institutions as easily as
email. This interconnectivity means more access for individuals,
lower costs for banks, and more revenue for businesses. For more
on Stellar.org, visit http://www.stellar.org.
*Source: World Bank UFA2020 Overview: Universal Financial Access
by 2020. April 20, 2017.
http://www.worldbank.org/en/topic/financialinclusion/brief/achieving-universal-financial-access-by-2020
Media Contact:
Leesa D'Alto
212-671-9806
leesa.dalto@ibm.com
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