Tech giant IBM has launched a new blockchain banking solution, which enables financial institutions to reduce the settlement time and lower the cost of completing universal cross-border payments for businesses and consumers.

The new payments solution, launched in partnership with technology partners Stellar and KlickEx Group, is said to improve the speed in which banks clear and settle payments on a single network.

The blockchain distributed ledger will boost financial flows globally, for all payment types and values, and allows financial institutions to select the settlement network for the exchange of central bank-issued digital assets.

The solution is currently operational in 12 currency corridors across the Pacific Islands and Australia, New Zealand and the UK.

IBM intends to expand the capabilities of the solution in order to support central bank-issued digital currencies, securities, bonds and structured financial assets.

IBM industry platforms senior vice president Bridget Kralingen said: “With the guidance of some of the world’s leading financial institutions, IBM is working to explore new ways to make payment networks more efficient and transparent so that banking can happen in real-time, even in the most remote parts of the world.

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“Making distributed ledger technologies more interoperable is the latest example of IBM’s leadership driving the rapid advancement of blockchain.”

Stellar co-founder Jed McCaleb added: “This new innovation and collaboration represents a significant milestone for Stellar as well as the financial technology industry as a whole.

“We are using blockchain technology in production to facilitate cross-border payments in multiple integrated currency corridors. Currently, cross-border payments tend to take up to several days to clear.

“This new implementation is poised to start a profound change in the South Pacific nations, and once fully scaled by IBM and its banking partners, it could potentially change the way money is moved around the world, helping to improve existing international transactions and advancing financial inclusion in developing nations.”