The banking giant Citigroup has successfully completed a proof-of-concept for blockchain-based cross-border payments in cooperation with the Inter-American Development Bank (IADB).
According to an announcement on Thursday, Citi Innovation Labs and IADB enabled Citigroup to make multiple payouts from the United States to a recipient in the Dominican Republic via the LACChain blockchain network – a proprietary initiative of the IADB regional program LACChain.
As part of the project, the IADB deposited token funds denominated in US dollars into a Citi account and transferred the funds using digital wallets, explained IADB’s blockchain specialist and technical director of LACChain, Marcos Allende. “After tokenization, those funds were converted into the local currency – Dominican pesos – using the exchange rate set by Citi,” he said.
The blockchain-based pilot allowed the IADB to instantly track transactions, exchange rates and fees, and possibly brought a new method for cross-border payments from the US to countries in Latin America and the Caribbean.
“There are many uses for inclusive cross-border payments, such as: B. Official development aid and international remittances. There is no doubt that they are extremely important to the economy of our region and especially to the final beneficiaries and families who receive referrals, ”noted Irene Hofman, CEO of IADB Lab.
The IADB is an international organization that supports the economic development of Latin America and the Caribbean, social development and regional integration. IADB has actively researched blockchain technology to accomplish its mission. The innovation laboratory IDB Lab set up its blockchain-focused LACChain program in 2019.
The open source LACChain runs on the blockchain and smart contract platform Quorum from JPMorgan.
Citigroup is no stranger to blockchain technology. Back in 2015, the bank developed three blockchain-based systems and a pilot cryptocurrency called Citicoin to investigate more efficient cross-border transactions.