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Citigroup has announced cooperating with the Inter-American Development Bank (IADB) to carry out a proof of concept for blockchain-based cross-border payments.
In the test, Citigroup’s Citi Innovation Labs and IADB enabled multiple payouts of tokenized money from the United States to a recipient in the Dominican Republic. The IADB deposited tokenized USD in a Citi account and transferred this money via digital wallets.
The money was converted into the local Dominican currency (DOP) after tokenization, using the exchange rate set by Citigroup. The test used the LACChain blockchain network, a development of the IADB’s regional LACChain program.
IADB was able to provide instant traceability of transactions, exchange rates and fees, creating a new method for cross-border payments from the United States to countries in Latin America and the Caribbean.
This should facilitate official development aid and international remittances, for example. The IADB is an international organisation supporting the economic and social development of Latin America that uses blockchain technology to accomplish their goals. Their innovation laboratory IDB Lab set up its blockchain-oriented LACChain program in 2019. The open source LACChain runs on the blockchain and a smart contract platform Quorum from JPMorgan.
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