40-50 banks expected to use Stellar-powered IBM World Wire
Put Tuesday 1.40am (UTC) on 19 March in your calendar of major Stellar Lumens events.
Speaking to Finder at IBM Think 2019, IBM head of blockchain Jesse Lund revealed that 40-50 banks are expected to join the Stellar-based IBM World Wire service in the near future.
"We've got a launch announcement coming out soon... we're going to be supporting more than 50 countries out of the gate, 30-40 currencies, and enough market makers to drag along 30 or 40 banks, so we'll have a significant portion of the world covered," he explained.
Several banks have already confirmed that they plan to issue digital assets, including stablecoins of their own, through the Stellar-powered IBM World Wire.
"We've got letters of intent with several banks around the world to support and issue digital currencies, stablecoins and other currencies," Lund confirmed.
"Our goal is to continue to expand that network and to provide global coverage within 3-5 years where you can actually send remittances in a consistent way, immediately, at a very low cost, from anywhere in the world to anywhere in the world."
The next major announcement around this is likely to be on 19 March.
"I'll be keynoting a major event in Singapore with my friend Jed McCaleb (Stellar founder)... we'll be talking about the partnership together and making a special announcement about the product," Lund says.
This major event is most likely the Money 20/20 conference in Singapore, whose schedule shows Jesse Lund and Jed McCaleb making a special announcement on Tuesday 19 March, at 9.40am local time (1.40am UTC).
Lund also said, very emphatically, that publicly accessible central bank digital currencies are en route.
— Fred Schebesta (@Schebesta) February 19, 2019
A matter of liquidity: Why this is so important for Stellar
Stellar was picked for its transparency and scalability, Lund explains, as well as its ability to host a wide range of assets to be traded openly in the Stellar decentralised exchange. Having a thriving, open and frictionless decentralised marketplace for a wide range of assets is key to Stellar's – and IBM's – vision for the future of payments.
This kind of system opens the doors to an incredible range of benefits. For example, consider how it could shape the future of international payments.
- Bank international transfer: You give money to a bank. The bank then sends the funds along a network of correspondent banks. It takes up to a week to arrive, the fees can easily top $50 and the exchange rates are set as high as possible to drive additional profits to the bank.
- Contemporary money transfer: You give money to a third party. It batches payments to offer a more competitive deal than a bank transfer, but still sets its fees and exchange rates as high as it can while remaining competitive.
- Stellar money transfer: A frictionless marketplace for digital assets allows for instant money transfers anywhere in the world at costs of a fraction of a cent. You want to trade digital USD for digital EUR, someone else wants to trade digi-EUR for digi-USD, so you just make a trade. By going peer to peer you can both make the trade at market rates with fees of just a fraction of a cent to cover Stellar network costs. By pooling trades in a sufficiently deep market you'll never have to wait for a match.
This marketplace is "really targeted to remittance use cases right now," Lund says. In other words, it's designed to make small and fast transfers.
There's one key obstacle though.
The global remittance business is about $700 billion per year. That's more than five times the total cryptocurrency market cap. So this system needs an incredible amount of liquidity to work.
That's why this impending announcement is expected to be such a big deal. By all indications, on 19 March Stellar and IBM will jointly reveal enough new market makers and other participants to go a long way towards solving this problem. The end result is that Stellar takes a major step towards real world use and wide adoption.
Put it in your calendar!
Disclosure: The author does not hold any cryptocurrencies at the time of writing.
- Economist: Stablecoins are doomed to be either too fragile or unscalable
- Coinbase going public: A new way to get broad crypto exposure?
- This week’s big altcoin moves have been cooking since June
- IOTA launches Pollen update: End of an era, start of another
- 5 curious findings from a new government cryptocurrency survey