IDB teams up with CITI Innovation Labs to achieve cross-border payments over blockchain

By Pavithra R

The Inter-American Development Bank and Citi Innovation Labs has announced a successful proof of concept to make cross-border payments from the United States to countries in Latin America and the Caribbean, using blockchain and tokenized money,

“There are many applications of inclusive cross-border payments, such as official development assistance and international remittances. There is no doubt that they are extremely important for the economies of our region and, more importantly, for final beneficiaries and families receiving remittances”, commented Irene A. Hofman, CEO of the IDB Lab.

The solution in addition to its potential for cross-border payments may have a potential impact on vulnerable groups, enabling enhancements in applications such as remittances. The solution offers full traceability of transactions, exchange rates, and fees.

“For the proof of concept, the IDB deposited funds denominated in dollars in a Citi account, which were hold, tokenized, and transferred using digital wallets. After tokenized, these funds were converted to local currency -Dominican pesos- with the exchange rate established by Citi. Exchange rates, payment status, and fees were traceable and transparent at all times as the transaction could be checked in the LACChain Blockchain”, explained Marcos Allende, IDB Specialist in Blockchain and Technical Leader of LACChain.

“We have learned a lot in this joint effort with the IDB about the use of blockchain technology for cross- border payments. We have demonstrated that it is possible to connect the LACChain Network with the WordLink APIs and leverage the benefits of blockchain technology,” said Piotr Marciszewski, the project coordinator from Citi.