The crypto market, while still considered relatively new, introduced the notion of carrying a digital asset that can work in similar ways to fiat currency, but with increased efficiency. Over the course of time, questions started to flourish in relation to its “real-use cases”.
Today, more and more businesses are trying to make use of technology and cryptocurrencies to initiate efficient cross-border payments. A great example of this is Ripple, who has since entered agreements with over 200 established institutions as noted by Forbes.
Unfortunately, the spotlight is never meant to shine on one person or firm, as competition leads to newer ideas and solutions, hence giving others a shot. This supposedly is the case at the moment, as Forbes has recently reported on IBM’s effort in creating a relatable solution, which they’ve since dubbed, “Blockchain World Wire”. This leads to the question as to which firm (Ripple, IBM or any others) consumers are more likely to lean towards for cross-border payments.
Forbes took the time to explore the different facets of said solutions by analyzing who the services might be directed towards, what factors could potentially prevent success and whether people see value in switching from a traditionally-used system to one that seems to be struggling to blend with society.
The first argument made is that Ripple, IBM, and JPM related cross-border payment solutions all either involve traditional, financial institutions or are longing for the establishment of partnerships with such players. This questions whether the decentralized aspect is taken into account.
Second, experts question how willing firms will be in transitioning from traditionally-accepted systems to one of relative infancy and “innovation”. Elizabeth White from the White Company, a firm specializing in crypto-related global payments, was quoted saying the following:
“Large intentional banks have been using systems like SWIFT for decades […] While blockchain would significantly modernize, automate, secure and speed up the whole process, it would require retraining and reworking a bank’s entire operations to implement.”
Interesting as it is, this is definitely a true argument, as said establishments need to evaluate the value of transitioning. Adding to the aforementioned, White does trust that IBM’s World Wide could overtake systems like SWIFT, however, she feels that there are still limitations attached. In particular, it was noted that World Wide is not open to everyone, which means those who do not have access will still have to retort to traditional banks.
Another striking point made is in regard to society’s acceptance of blockchain and cryptocurrencies. White pointed out that if public demand is not significant, then firms see no reason to implement or change their ways of operation.
Lastly, the fact that education on blockchain and cryptocurrencies is not necessarily yearned for by many, especially in the banking sector, makes it all the more difficult to fill in the existing gaps.
For the moment, White seems to be confident in the direction the White Company has been and continues to take. She shared the following:
“Our payments platform, for example, is built on Stellar, which is a dedicated payments protocol supported by IBM, Deloitte, Stripe and others, and is focused on optimizing speed and efficiency of payments.”
Despite all the crypto and blockchain supporters that exist today, convincing that blockchain and cryptos can promote efficiency appears to be the problem. The aforementioned reasons speak for itself and are applicable to any business – not just banks. Implementation requires a willingness to learn about this new technology and it could potentially lead to expanding one’s knowledge – and this could be one of the break-or-make factors for IBM and others.