The research segment of banking giant Citi in partnership with Inter-American Bank (IDB), has successfully completed a proof-of-concept project that enables cross-border payments using blockchain.
A press statement from IDB indicates that the project carried out alongside Citi Innovation Labs powered cross-border payments from the U.S. to countries in Latin America and the Caribbean.
The project also used tokenized money that guarantees complete traceability of transactions, exchange rates, and fees.
The system uses the LACChian Blockchain Network with payments sent from IDB offices in Washington D.C. to Dominican Republic recipients.
IDB blockchain specialists and Technical Leader of LACChain Network Marcos Allende explains how the transaction occurred. According to Allende:
“For the proof of concept, the IDB deposited funds denominated in dollars in a Citi account, which were held, tokenized, and transferred using digital wallets. After tokenized, these funds were converted to local currency -Dominican pesos- with the exchange rate established by Citi. Exchange rates, payment status, and fees were traceable and transparent at all times. The transaction could be checked in the LACChain Blockchain.”
Furthermore, Piotr Marciszewski from Citi said it is possible to connect LACChain Network with WordLink APIs while leveraging blockchain technology.
IDB to keep exploring innovative technologies
The project leader from IDB’s Treasury, Rubén Gutierrez, stated that consequently, exploring innovative technologies is now at the bank’s core. Additionally, participants in the project note that vulnerable groups can benefit from timely remittances.
In general, the test explored opportunities and challenges faced by financial institutions in rolling out cross-border payments using blockchain technology.