Using blockchain and cryptocurrencies to improve the efficiency of international money transfers is a common point of discussion among crypto advocates and forward-thinking members of the current financial industry.

Many different projects including Ripple’s X-Rapid and OmiseGo are attempting to implement solutions to improve cross-border transfers. Additionally, all of the pure currency coins (Bitcoin, Bitcoin Cash, Litecoin, Monero, ZCash, etc) are often touted as efficient tools for sending money overseas. However, it seems one coin has partnered with one of the world’s largest companies to deliver a novel approach to sending money.

Stellar (XLM) has been working with IBM for some time, however, in recent months the OMFIF, an independent think tank covering global economics, published a report that described the efforts of IBM Blockchain World Wire to use blockchain to improve payments.

IBM Blockchain World Wire is a project that uses the Stellar blockchain to allow fiat payments to be sent between countries. It incorporates both a permissioned and public version of the Stellar Blockchain and the creation of other tokens which represent digital pre-funded fiat currencies. These tokenized placeholders for fiat currencies allow money to be transferred via blockchain and provide many benefits on a systematic level.

By using the Stellar network to transfer currencies, IBM World Wire allows money to be sent between two parties without the need to go through multiple intermediaries. This then reduces the amount of funding that must be committed to the system to make it operational. Less capital must be locked up in pre-deposit because funds no longer must be located at multiple locations in the transfer process. In the end, this results in improved liquidity and lower costs throughout the system. It also improves the time needed to process transactions.

IBM World Wire is also highly flexible as it both integrates into existing payment systems and allows different methods of settlement that a user could select if they were not immediately comfortable with cryptocurrencies.

Ultimately, this is good news for Stellar because it represents a highly substantial use of its blockchain. Projects like this help to cement Stellar as a contender and perhaps a victor in the hotly contested blockchain international transfer sector. If IBM World Wire becomes a well adopted wholesale project, it may prove to be a serious thorn in the side of Ripple’s global ambitions.

IBM World Wire was launched in October and is currently in its first few months of global operations. It represents the first layer of what may be a multi-layer protocol, building one of the first few globally adopted hybrids between a public and permissioned blockchain. The platform that IBM has built in conjunction with Stellar may evolve into a truly useful protocol and a model for other applications which merge permissioned and public functions.