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Six banks sign up for IBM Blockchain payment network

Amandeep Sonewane | Mar. 19, 2019
Six banks sign up for IBM Blockchain payment network

March 19, 2019, | AtoZ Markets - IBM is signaling its banking clients into the world of cryptocurrencies. Six international banks have signed letters of intent to introduce their stablecoins via IBM Blockchain payment network the 'World-Wire.'

On March 18, 2018, IBM and Stellar jointly appeared during a keynote speech at the Money 2020 Asia in Singapore. Where, IBM stated that so far its Blockchain World Wire (BWW) payment network has facilitated payment locations in 72 countries, with 47 currencies and 44 banking endpoints that include banks like Banco Bradesco, Bank Busan, and Rizal Commercial Banking Corporation that will issue their Stablecoins on IBM Blockchain payment network 'World-Wire.'

IBM Blockchain payment network

IBM’s cross-border payment network BWW that is now live was launched in September 2018 in collaboration with Stellar aims to leverage cryptocurrencies to facilitate real-time international settlements between banks.

IBM Blockchain GM Marie Wieck stated that :

“We’ve created a new type of payment network designed to accelerate remittances and transform cross-border payments to facilitate the movement of money in countries that need it most. By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide.”

IBM blockchain payment network went live on Monday, March 18, 2019, and while the partner banks are awaiting authorization from their respective regulators, there is already one stablecoin that’s running on the World-Wire.

A San-Francisco based startup Stronghold created the U.S dollar-backed stablecoin. According to IBM’s head of Blockchain for Financial Services Jesse Lund, while Stronghold’s USD-backed coin is currently serving as an on-ramp for greenbacks, there doesn’t yet exist pay-in/pay-out locations in the United States adding that it is on limited production. Lund stated that IBM has so far received a favorable response from regulators. 

He further stated:

“So we are starting with markets that are outside of the U.S., but it won’t be long before we add the U.S. as an operating endpoint. It will be sometime this year; we will get to it, third quarter, fourth quarter something like that.”

2018 bearish market triggered the creation of stablecoins

Apart from issuing their tokens, the deal enables the banks to use Stellar Lumens (XLM) as a bridge currency when they cannot trade one type of fiat currency for another. The World Wire could also support other cryptos, but according to Lund, at the moment it is only supporting XLM because financial institutions are careful of the volatility of cryptocurrencies.

The cryptocurrency industry’s 2018 bearish market occasioned the creation of a flood of stablecoins which aim to remain stable in the face of high volatility in Bitcoin and other cryptocurrencies. The leading stablecoins include Circle’s USDC, Paxos’ PAX, and Gemini’s GUSD, all of which are backed by the USD. Moreover, JPMorgan Chase announced the creation of the JPM Coin last month, which is a dollar-backed bridge currency for institutional clients.

Stellar (XLM) technical overview

The network shall also open up possibilities of the banking institutions using Stellar Lumens or XLM as a payment option. Stellar acts as a bridge between different fiats in cases where the trading of different fiats becomes difficult. Jesse Lund also added that the World Wire network could start supporting other cryptocurrencies in future, however, it currently supports just Stellar Lumes due to the volatility in the cryptocurrency market.

Stellar or XLM has been one of the top performing cryptocurrencies since past few days. Data from coinmarketcap shows that it increasing 11.6% over the past seven days making it the top performing cryptocurrency in the cryptomarket. The coin started its outperformance last week when it broke above an ascending triangle pattern it had been forming. An ascending triangle pattern is a bullish trend continuation pattern that forms when the price has formed higher lows and has also breached its resistance level. Later, the price of the coin managed to break above the resistance at $0.1172 mark.

The price of the coin has continued to outperform and has reached previous support and resistance point $0.107 mark, with the daily RSI and MACD showing buying pressure to be high. Moreover, there is an increased chance that the price can significantly break above this level. The next key level to monitor for Stellar is $0.127 which has acted as both support and resistance level.

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