Banking giant Citigroup has successfully completed a proof of concept for blockchain-based cross-border payments in partnership with the Inter-American Development Bank (IADB).
According to Citigroup's announcement on Thursday, Citi Innovation Labs and the IADB enabled several payments from the United States to a recipient in the Dominican Republic using the LACChain blockchain network, a proprietary initiative of the IADB's regional LACChain program .
As part of the project, the IADB deposited tokenized U.S. dollar-denominated funds into a Citi account and transferred them via digital wallets, explained IADB blockchain specialist and LACChain technical leader Marcos Allende. "After tokenization, these funds were converted into the local currency - the Dominican peso - at an exchange rate set by Citi," he said.
The blockchain-based pilot enabled IADB to instantly trace transactions, exchange rates and fees, potentially introducing a new method for making cross-border payments from the United States to Latin American and Caribbean countries.
