Tech giant IBM has made a big announcement at Sibos 2017 which links it to the cryptocurrency initiative. The company has partnered with blockchain startup Stellar to create a platform that could be the first ever public cryptocurrency foray. It has successfully run transactions via lumens, Stellar's custom cryptocurrency.
At the moment, the platform is limited to cross-border payments with British pounds and Fijian dollars. However, it is aimed to expand exponentially and soon include as many as seven fiat currencies of the South Pacific, which includes the New Zealand and the Australian dollar.
The innovative idea boasted by this new platform is how public and private blockchain technologies can be used together to perform safe transactions via cryptocurrency. The IBM blockchain solutions are focused on transaction clearing, but the settlement itself will be performed via Stellar's blockchain. As such, the platform makes use of lumens to connect fiat currencies digitally. This allows the transaction to be performed without the two parties ever coming across cryptocurrency directly. This remains linked to the platform alone without ever involving the parties of the transaction.
"When trading between multiple currencies, it helps to have a bridge currency to reduce the ledgers needed to maintain. Lumen provides that single ledger that can bridge currencies.", says Jed McCaleb, the founder of Stellar.
The Blockchain Future of Economy
Beyond any shadow of a doubt, blockchain and cryptocurrency are going to have a major role to play in the future of global economics. In fact, more and more blockchain utilizing companies have evolved to fit certain niche markets, such as the world of e-sports that has introduced specialized blockchains and even its very own cryptocurrency token.
IBM is currently working on its very own blockchain technology, but its collaboration with startup Stellar proves the value of blockchain companies working together. Not only was it a pioneer project from a technological standpoint, but it actually extended much further than the IT world.
To complete a project of this magnitude, IBM has worked closely with TD Bank, National Australia Bank, as well as Wizdraw (HK) of WorldCom Finance. As put by Jesse Lund, IBM's VP of global blockchain development, "We've got the bankers and the renegades altogether".
Getting all of these companies from diverse backgrounds to work together is only a small part of IBM's plans for the development of a true blockchain ecosystem. This multidisciplinary approach to the economy will define the future of global economics because more and more elements of it will be transferred into this new technological world.
For the moment, it remains to be seen how IBM and Stellar's platform will perform. Experts predict as much as 60% of the region's cross-border transactions to be rolled on the platform once it will include all the seven currencies, but it may still be too soon to tell.
IBM aims to continue its blockchain projects and to channel them towards the digitalization of central bank money. This platform is merely the first trial version of what could be the banking technology of tomorrow.