How blockchain is becomming the 5G of the payment industry

Fibo Quantum

As more blockchain-based payment networks and fiat-backed digital currencies – including one from the largest U.S. bank – emerge, experts and analysts are predicting a sea change for the financial services industry.

“I think you’re starting to see a growing consensus,” said Matt Savare, a partner who works in the technology group of New Jersey-based law firm of Lowenstein Sandler LLP. “I do quite a bit of FinTech and I can tell you my clients… the banks, are inherently conservative – at least the large ones. But once they see other banks adopt new technologies, you see it snowball. Other banks will often join on in pretty quick fashion.”

On the heels of JPMorgan Chase & Co. creating its own stable coin token for use on blockchain distributed ledgers, IBM last week launched its Blockchain World Wire, which will enable banks to transfer tokens and cryptocurrency in near-real time, cutting out banking intermediaries and lowering capital costs and clearing fees.

The distributed ledger technology (DLT) network will initially enable cross-border payments and settlements based on the Stellar protocol, a decentralized payment network that uses its own cryptocurrency, Stellar Lumens (XLM). While the IBM network will support XLM, it will primarily use stable coin backed one-for-one by the U.S. dollar and other national currencies.

In other words, IBM will run the blockchain infrastructure – the computer nodes and software – and the banks will transmit digital tokens tied to fiat currency over the network.

The Rizal Commercial Banking Corporation (RCBC), one of the Philippines’ top 10 banks by assets, will be among the first of four using the Blockchain World Wire for remittance payments services. Those payments are mainly made by foreign workers who send money back to their home country in the same way Western Union and MoneyGram do today.