Two announcements in emerging markets this week suggest that banks are beginning to move away from SWIFT, a global financial messaging network, to blockchain based payments.
Banco Masventas (BMV), an Argentine bank, has partnered with Bitex to facilitate cross border transactions over the Bitcoin blockchain. Bitex, a crypto exchange in Latin America, will be responsible for converting bitcoin to fiat and vice versa, cutting the processing time from roughly three days to fewer than 24 hours and reducing the transaction costs associated with international transfers considerably. Essentially, customers would cover the bitcoin transaction fee paid to miners verifying the transactions. That BMV chose bitcoin points to the enhanced security and robust nature of the Bitcoin blockchain, and bitcoin’s potential to serve as a means of exchange.
Philippines also is embracing the blockchain for payments. Union Bank of the Philippines, one of the country’s largest banking institutions, will use the Kaleido blockchain platform to facilitate transfers among its 7000 islands.
Other banks in Asia are piloting blockchain protocols like Ripple for cross border payments to save both costs and time. According to Ripple, its pilot test cut the time to consummate cross border transactions from days to two minutes and cut costs by 40-70%.
Thanks to the simple, secure, and real-time global payment networks enabled by blockchain technology, old school payment models are at serious risk.
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