IBM (XETRA: IBM) and a network of banks have begun using digital currency and blockchain software to move money across borders throughout the South Pacific, CNBC reports.
Payments under this new project will be backed by a cryptocurrency called Lumens (XLM), developed by Stellar.
Jesse Lund, Vice President of Blockchain Technologies at IBM, said in an interview with Fortune: “This is the next step in the evolution of blockchain technology. It’s live money moving around a network.”
He added that the current arrangement with Stellar is only temporary and that banks would create cryptocurrencies of their own to integrate them into the system.
“This new innovation and collaboration represents a significant milestone for Stellar as well as the financial technology industry as a whole. For the first time, public blockchain technology is being used in production to facilitate cross-border payments in multiple integrated currency corridors,” said Jed McCaleb, co-founder of Stellar.org.
IBM promises a platform where both consumers and merchants will transfer money in almost real-time, which was not possible until the emergence of blockchain technology.
The whole network covers twelve Forex channels in the South Pacific region, including Australia, New Zealand, Fiji, and Tonga. By the first quarter or 2018, these banks should process up to 60% of all cross-border transactions in the whole region.