The banking giant Citigroup, in collaboration with the Inter-American Development Bank (IADB), has completed proof of the concept of blockchain-based cross-border payments.
According to an announcement on Thursday, Citigroup Citi Innovation Labs and IADB have made several payments available from the United States to a recipient in the Dominican Republic using the LACChain blockchain, an effort owned by IADB’s regional LACChain program.
As part of the project, IADB deposited funds in USD tokens into a Citi account and transferred funds using digital wallets, explained Marcus Allende, IADB Blockchain specialist and technology manager at LACChain. “After converting this money into tokens, they were converted into the local currency – the Dominican peso – at Citi’s exchange rates,” he said.
A blockchain-based pilot program enabled IADB to track transactions, exchange rates and fees in real time, potentially offering a new method of making cross-border payments from the United States to Latin America and the Caribbean.
There are many applications for general cross-border payments, such as official assistance and international transfers. “There is no doubt that they are extremely important to the economy of our region, and more importantly, to the final recipients and families who receive remittances,” said Irene Hoffman, CEO of IADB.
The Inter-American Development Bank is an international organization that supports economic development, social development and regional integration in Latin America and the Caribbean. IADB is actively exploring blockchain technology to fulfill its mission since the IDB laboratory created the blockchain-focused LACChain program in 2019.
Open source LACChain works with JPMorgan blockchain and Quorum smart contract platform.
Citigroup is familiar with blockchain technology. In 2015, the bank developed three blockchain-based systems and an experimental digital currency called Citicoin to investigate more efficient cross-border transactions.