Citigroup and the Inter-American Development Bank (IADB) have successfully tested a proof of concept (PoC) for payments between the United States, Latin America and the Caribbean.
Citigroup and IADB managed to make several payments to the Dominican Republic using the LACChain system, which operates on the basis of the Quorum blockchain. IADB blockchain specialist and LACChain technical director Marcos Allende said that as part of the testing, the IADB transferred USD tokenized funds to a Citigroup account.
These funds were converted into Dominican pesos at Citigroup exchange rates and then transferred overseas using digital wallets. The blockchain-based pilot project allowed banks to instantly track transactions, as well as view exchange rates and commissions, Allende said.
There are many solutions for cross-border payments. However, IADB Lab CEO Irene Hofman believes that blockchain will allow for new payments and money transfers from the United States to Latin America and the Caribbean, ensuring high speed and transparency of settlements.
This is important not only for the final recipients of the money, but also for the economy as a whole. The IADB is actively exploring the possibilities of blockchain for the social development of Latin America, so in 2019 IADB’s research arm, IDB Lab, began working on the creation of an open platform LACChain.
Back in 2015, Citigroup planned to launch its own digital currency, Citicoin, to facilitate international payments. However, the banking giant later came to the conclusion that the existing technological solutions were more effective, so he refused to launch Citicoin.