- The financial services institution Citi has used its Innovation Labs arm to work with the Inter-American Development Bank (IDB) as part of a new move to test out the effectiveness of blockchain payments.
- A transfer was made on the LACChain Blockchain Network between Washington DC and the Dominican Republic in a way that was efficient and transparent, the organisations said.
- Spokespeople for the IDB praised the move as an example of the bank furthering its mission to improve people’s lives, and said that there were many potential applications for the technology in the future.
The innovation arm of a leading financial services institution has worked with the Inter-American Development Bank (IDB) on a new blockchain-powered online money transfer test.
Citi Innovation Labs and IDB worked on a successful transfer of ‘tokenised money’ originating in the US and arriving with recipients in Latin America.
The payment, they said, originated in Washington DC and was transferred to the Dominican Republic, which is located in the Caribbean.
It was carried out using the LACChain Blockchain Network, the organisations said.
To begin with, the IDB made a placement of US dollars into a Citi-run bank account to be held while the transaction was prepared.
E-wallets were used to tokenise the money and then move it into the Dominican Republic’s currency, the Dominican peso.
A high level of transparency was available to the participants in the transaction, the organisations said.
Fees and exchange rates, for example, could be seen upfront by those making the transfers.
In a statement, a spokesperson for the Treasury Department of the IDB said that innovation in this regard is vital for the region.
Rubén Gutierrez, who is a project leader in that department, said: “The exploration and adoption of innovative technologies for the optimization of payment processes are essential to support the IDB Group mission of improving the lives of the region by financing development projects.”
The chief executive officer of the IDB Lab went on to say that there are several different ways that this technology could be used.
Irene A. Hofman said that development aid was one additional way on top of its use in this case as a source of personal online money transfers.
“There are many applications of inclusive cross-border payments, such as official development assistance and international remittances,” she said.
“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,” she added.
The Inter-American Development Bank is a multilateral financing organisation focusing on Latin America and the areas around it.
It offers economic and social development opportunities for organisations.
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