LIVE NOW

40-50 banks expected to use Stellar-powered IBM World Wire

Posted: 20 February 2019 12:36 pm
News

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.

Stellar complete guide: What it is, how it works, where to buy

"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.

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!

Learn more about how and where you can buy Stellar (XLM)



Disclosure: The author does not hold any cryptocurrencies at the time of writing.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Crypto explained


Latest cryptocurrency news

Picture: Shutterstock

Latest crypto guides

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site