IBM is using the technology behind bitcoin to help businesses in countries with weak banking systems

pulse

October 16, 2017 9:32 PM

The new project could put an end to the weeks-long wait times and expensive transaction fees when doing business with countries like Samoa and Fiji.

IBM is using the technology behind bitcoin to help farmers and other small businesses in underdeveloped countries participate in global trade.

IBM announced the project on Monday, in partnership with fintech

The companies will use IBM's blockchain technology to process financial transactions across borders and currencies — a process which is often prohibitively slow and costly for small business owners, especially when they are in developing regions with smaller banking infrastructures.

The project is focused on what Stellar calls "

IBM will essentially bring scale and bank partnerships to Stellar's existing work on global blockchain transactions, as well as the efforts of KlickEx Groups, a liquidity provider, to get bigger international banks to work with these marginalized regions.

The announcement is the latest of several projects IBM is working on that use blockchain technology. Earlier this year, IBM announced a collaboration with food distributors like Walmart and Nestlé, that aims to mitigate the spread of food-borne illnesses through more thorough tracking of the supply chain, from the farm to the store.

No middleman

One of the great promises of blockchain is its ability to quickly and securely exchange money across borders without having a middleman.

The technology first grew in popularity around the 2008 financial crisis, when an anonymous creator known as

From the businesses' perspective, the new blockchain product can be used to manage both the legal and financial credibility of a transaction — from establishing the terms of a contract, to managing documentation, putting up collateral, obtaining letters of credit, and finalizing terms with immediate payment, according to IBM.

The payment system is already at work in 12 different regions across the Pacific Islands, Australia, New Zealand, and the UK.

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