IBM Introduces ‘Blockchain World Wire’, Its Stellar-Powered Near Real-Time Cross-Border Payments Solution

IBM has quietly introduced "Blockchain World Wire", what it calls "the new financial rail that can simultaneously clear and settle cross-border payments in near real-time", and a product that has the chance to become a competitor to Ripple's xRapid.

Here are two diagrams from IBM's website showing how the system is designed to work:

World Wire - Fig 1.png

World Wire - Fig 2.png

The process of making a cross-border payment using Blockchain World Wire (which uses the Stellar protocol) has the following steps:

  • "Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other digital asset as the bridge asset between any two fiat currencies."
  • "The institutions use their existing payment systems – seamlessly connected to World Wire’s APIs – to convert the first fiat currency into the digital asset."
  • "World Wire then simultaneously converts the digital asset into the second fiat currency, completing the transaction." ("All transaction details are recorded onto an immutable blockchain for clearing.")

IBM claims Blockchain World Wire has the following advantages over traditional payment solutions:

  • Faster Payment Processing (simultaneous clearing and settlement)
  • Lower Costs (reduced capital requirements for cross-border transactions)
  • Increased Efficiency (one exchange fee between all currencies)
  • Supports payments of any size, in any asset type, to any destination

Given the lack of a press release and the fact that neither IBM's nor Stellar Development Foundation's Twitter account has any mention of this product, it seems like the two parties are working together, but the product is not ready for launch yet. Also, on its website, IBM does not provide much in the way of technical details other than revealing that it uses technology from Stellar, which was created by Jed McCaleb and Joyce Kim. At this point, it is worth noting that prior to releasing Stellar in July 2014, McCaleb co-founded Ripple (with Chris Larsen, in 2012) and served as its CTO until 2013. 

A surface level reading of Blockchain World Wire's description makes it sound a little like Ripple's xRapid. IBM's solution appears capable of using any digital currency -- not just XRP -- as the bridge currency, which could be seen both as a good thing and a bad thing. Stellar fans are generally excited because they are hoping that in most cases Lumens (XLM) will get used as the bridge currency. Some Ripple fans are a little worried that some financial institutions might choose Blockchain World Wire (whenever it becomes ready) instead of Ripple's xRapid (which uses XRP as the bridge currency, and which eliminates the need for nostro accounts) because of their existing relationships with IBM, even though to them IBM's solution sounds inferior to xRapid.

We will update you as more details about Blockchain World Wire become available.

Featured Image Credit: Photo via Pexels.com

Binance ‘Unknowingly’ Earns $775K via Staking, Set to Launch Huge XLM Giveaway

On Thursday (July 18), Binance, the world's largest cryptoasset exchange (by adjusted trading volume), made a rather interesting announcement: it had "unknowingly" earned 9.5 million Stellar Lumen (XLM) tokens through staking rewards, and it is going to give all of it away to all Binance users who maintain XLM balances between July 20 and September 1.

Binance explained via a blog post that in August 2018 the Binance team followed the advice of the Stellar Development Foundation "to change some parameters on both cold and hot wallets," which resulted in the exchange "unknowingly" earning staking rewards for its XLM holdings since 31 August 2018.

Then, this week, while the Binance team was considering the idea of adding support for XLM staking, it found out that Binance had earned around 9.5 million XLM tokens (each of which was worth approximately $0.08157 at the time). Binance notes that all "weekly staking rewards between then and now are documented on the blockchain." 

So, the team made two decisions:

  • add support for XLM staking to Binance.com; and
  • give away the aforementioned staking rewards to the Binance community (i.e. Binance users).

This is not the first time that Binance has added staking support to Binance.com. The exchange already "distributes NeoGas for NEO holders, Ontology Gas for Ontology holders, VTHO for VeChain holders, and BitTorrent tokens for TRON tokens."

Here is how this 9.5 million XLM giveaway is going to happen.

From July 20, Binance will support XLM staking. Between this date and September 1, Binance will take "daily snapshots" of XLM balances in Binance user accounts.

Then, on September 1, Binance will "tally average user XLM balances based on these snapshots," and process the distribution of staking rewards to these user accounts (that maintained XLM balances during the staking period). Furthermore, the roughly 9.5 million XLM tokens that Binance has unknowingly earned to date will be distributed as a bonus payment to all Binance users who jave maintained non-zero XLM balances since July 20. 

Binance says in its blog post that it estimates this "one-time distribution of 9,500,000 XLM shared proportionately among Binance users" to be worth "10 to 12 months of typical monthly rewards."

According to a support article published on July 18, here are the details of Binance's "Monthly XLM Staking Airdrop Program":

  • Binance will start these daily XLM balance snapshots at 00:00 (UTC) on 20 July 2019.
  • This is how Binance will calculate the XLM staking distribution:

XLM generated by each user = Total XLM staking rewards received by Binance * User XLM holdings ratio. User XLM holdings ratio = User XLM holdings / Total XLM staked by Binance.

  •  In order to qualify for XLM staking rewards, Binance users must have a balance of at least 10 XLM.
  • This initial distribution of XLM staking rewards will be calculated until 1 September 2019, "with the total amount distributed equal to the staking rewards accrued on holdings during the 43 day period."
  • These XLM staking rewards are calculated on a daily basis and are distributed monthly. 
  • XLM distrubutions will be "completed before the 5th of each month."

In other Binance news, another support article explained that Binance's Margin Trading platform has added support for two margin assets (EOS and LINK), three borrowable assets (BNB, EOS, and LINK), and three margin pairs (EOS/USDT, EOS/BTC, LINK/USDT, LINKBTC).

Binance's announcement about its 9.5 million XLM giveaway may have helped the XLM price. According to CryptoCompare, XLM is currently trading at $0.08914, up 7.96% in the past 24-hour period:

XLM-USD 24-Hour Chart on 18 July 2019.png

Featured Image Courtesy of Binance