New Zealand’s KlickEx group, a company that provides money transfer services for the unbanked and for developing economies, has teamed up with IBM and US based blockchain network, Stellar
New Zealand’s KlickEx group, a company that provides money transfer services for the unbanked and for developing economies, has teamed up with IBM and US based blockchain network, Stellar, to offer a blockchain based service to financial institutions that the three claim will accelerate and reduce the cost of global payments for financial institutions and for their business and consumer customers.
They say it is expected to process up to 60 percent of all cross-border payments in the South Pacific's retail foreign exchange corridors including Australia, New Zealand, Fiji, Samoa and Tonga by early next year.
IBM says the service is run from the IBM blockchain platform on Hyperledger Fabric and was built in collaboration with Stellar.org, a non-profit organisation and associate member of Hyperledger, and KlickEx Group, which is acting as the founding financial institution for the region, servicing banks, retail clients and consumers using the new network.
According to KlickEx founder Robert Bell, chairman of Advanced Pacific Financial Infrastructure for Inclusion (APFII) — a public-private partnership initially funded by the United Nations and SWIFT — this is the first time blockchain has been made to work at an institutionally viable scale.
“Through KlickEx, the Pacific has had relatively low-cost, real-time, multi-currency payments for most of the past decade, and this project was a natural next step following our work to create seamless and borderless payments across the Pacific,”
The three organisations say the system is being used b APFII members and is already processing live transactions in 12 currencies across Australia, New Zealand the United Kingdom and Pacific Island nations.
“It has been designed to augment financial flows worldwide for all payment types and values and allows financial institutions to choose the settlement network of their choice for the exchange of central bank-issued digital assets,” they say.
“For example, in the future, the new IBM network could make it possible for a farmer in Samoa to enter into a trade contract with a buyer in Indonesia.
“The blockchain would be used to record the terms of the contract, manage trade documentation, allow the farmer to put up collateral, obtain letters of credit, and finalise transaction terms with immediate payment, conducting global trade with transparency and relative ease.”
Commercial banks such as Banco Bilbao Vizcaya Argentaria, Bank Danamon Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Kasikornbank Thailand, Mizuho Financial Group, National Australia Bank, Rizal Commercial Banking Corp. (RCBC) Philippines, Sumitomo Mitsui Financial Group, TD Bank, and Wizdraw (HK) of WorldCom Finance will be invited to join the network and help it expand in different parts of the world beginning in 2018.