Given the fierce competition in the crypto-sphere, Stellar Lumens (XLM) just edged its way into a collaboration that can send its value to the moon. If cryptocurrencies were the flavour of the year 2017, the year 2019 will definitely be all about enterprise adoption. That is exactly what the Stellar Development Foundation (SDF) is hitting on with its collaboration with International Business Machines Corporation (IBM).
The IBM-Stellar World Wire: What it is and what it’s not
The role of Ripple’s XRP in cross-border remittance cannot be underemphasized. Now, Stellar Lumens (XLM), through its partnership with computer hardware giant, IBM, has forged the IBM Blockchain World Wire – a project that is poised to become one of the largest decentralized cross-border remittance networks on the Stellar (XLM) blockchain.
The project is a step further to the current framework used by Ripple (XRP) and if successful, can trigger massive enterprise use of the Stellar (XLM) network for cross-border remittance in particular and use of cryptocurrencies for such transactions.
With presence in 72 countries of the world, the remittance tool is fortified with 44 banking endpoints and 1081+ unique currency trading pairs and compatibility with 47 currencies.
On the other hand, the IBM Blockchain World Wire can be tipped as a competitor to Ripple’s XRP. It’s an ebullient project on its own, which led to an increase in Stellar Lumens (XLM)’s price after the announcement/launch. To that end, it looks good to beat Ripple’s XRP after it gains massive adoption.
Is SWIFT going further down the slope?
Earlier before the advent of digital assets (cryptocurrencies), SWIFT held the fort in global/cross-border remittance. With the surge of crypto coins as transacting tools and the decentralized architecture of the Ripple (XRP)’s network, the institution was knocked to a tight corner. At a point, rumors filtered into town that the CEO of SWIFT had to bow out of his position because of the threats posed by Ripple (XRP).
Now that another viable decentralized cross-border remittance tool, the IBM World Wire, is coming up, there is a tendency that the era of fiat cross-border remittance as orchestrated by SWIFT is further going down the slope.
The only lifeline that can restrict the adoption of the IBM World Wire and of course any other decentralized payment tool is the traditional banking system’s resistance to innovation. It’s only a matter of time before these barriers give way for amazing payment technologies such as IBM World Wire.
Jesse Lund is Bullish
In the light of public anticipation for the project to begin fully, the Stellar Development Foundation, on whose premise IBM launched World Wire, sought the opinion of IBM’s Vice President, Jesse Lund. Highlights of the interview revealed his optimism that the project is a force to reckon with in both crypto and fiat transactions.
As he posited, the world needs an interconnected banking system that allows for interoperability across financial institution. Given the current formation, Jesse Lund hinted that such a prospect may not be possible but is achievable when banks and enterprises adopt the IBM World Wide payment structure.
Wiring the Funds
Taking a shot at decentralized payments, the International Business Machines Corporation (IBM), an American-based computer hardware giant, aims at facilitating cross-border remittance using its payment network – the IBM World Wire.
The formulation of the project is simple and is seamless for transactions. To begin with, financial institutions, such as banks, that want to send payments across borders using World Wire, have to migrate to the platform to clear and settle transactions in a matter of seconds. The IBM Blockchain World Wire, which is powered by the Stellar (XLM) protocol, allows transacting parties (banks) to come into agreement on the platform.
To institute a transaction, the financial institutions (banks) that want to make a transaction will agree to use a stable crypto coin of their choice, a central bank/fiat currency or any other cryptocurrency (digital asset).
Afterward, both parties will enroll their existing/fiat payment systems into World Wire API. The essence of doing this is to enable the platform to convert their fiat currencies into digital assets (cryptocurrencies). On completion of this step, World Wire will then convert the digital asset into the fiat currency of the receiving party. At the completion of each transaction, World Wire records the details of such transactions into its immutable blockchain network for clearing and safekeeping.
To break down the uniqueness of the IBM Blockchain World Wide, consider this scenario for maximum comprehension of this decentralized cross-border remittance:
Bank A (the sender) wants to transact with Bank B (the receiver) over the World Wire network. Both parties agree to make use of Bitcoin (BTC) for their transactions. That is because Bitcoin (BTC) is a stable crypto coin that cannot fluctuate easily. Bank A makes use of United States Dollars (USD) while Bank B makes use of Euros (EUR). They’ll now integrate their current/fiat payment networks, which they have been using for cross-border remittance into World Wire.
World Wire takes cognizance of this and converts the United States Dollars (USD) and Euros (EUR) deposited by the transacting parties into the value of the chosen stable crypto coin – Bitcoin (BTC). Both parties will confirm the value before World Wire proceeds to the next stage. It’s now up to the World Wire Blockchain to convert the funds from the sender (Bank A) to the home currency of the receiver (Bank B). In this case, it converts the value of the stable crypto coin (Bitcoin [BTC]) into its equivalent in Euros (EUR). At the end of the transaction, World Wire then records the details of the transaction into its immutable distributed ledger technology for safekeeping.
Ripple (XRP) is about to be Beaten
Ripple’s XRP has been in a battle of wits with fellow cross-border remittance tool – Stellar Lumens (XLM). With its formulation as a go-to decentralized payment structure for banks, Ripple (XLM) has been able to garner cult-like followership. However, that feat might be short-lived as IBM Blockchain World Wide, which has 44 banking endpoints and accepts 1081 unique currency-trading pairs in 72 countries, has come to disrupt the status quo.
Ripple (XRP) might find itself in a fix if it doesn’t step up in the game of decentralized cross-border remittance. The enterprise disposition of the IBM Blockchain World Wire and the use of the efficient Stellar (XLM) blockchain network make World Wire a cross-border giant that is rising in the crypto-sphere and Ripple (XRP) looks good to lose its cherished title anytime from now.