On September 25, the head of Calibra, David Marcus, published a blog post that stresses the shortcomings and drawbacks of the payments systems that are currently being facilitated by regional and international financial networks. He cited some service providers such as RT1 and SWIFT as well as central banks.
Marcus is the former president of PayPal, a world-renowned online payments system. According to him, his extensive experience in the financial industry led him to notice that the existing payments system has a limit in terms of reach and efficiency.
In particular, Marcus wrote that an individual could use one wallet to transfer and receive funds; however, doing the same between different wallets is not possible. He also emphasized the requirements and intermediaries that are present in the picture before an individual can send money from one wallet to another. Worse, liquidity pools are required at the receiver’s end so the money can be accessed immediately.
How Blockchain-based payment networks can change everything
David Marcus is one of the most significant team members of Facebook’s ambitious project, Libra. According to him, the forthcoming global stablecoin is a perfect example of a Blockchain-based payment solution. Users can process international fund transfers without worrying much about the transaction fee. Furthermore, this kind of network does not require liquidity pools of associated currencies.
As per the explanation, the removal of various intermediaries makes it possible for the provider to offer the service at a meager cost. Furthermore, the system does not entail operational complexities. Users would get more convenience in sending and receiving money as Blockchain innovation breaks the barriers set by traditional payment methods.
The growing traction for payment solutions based on Blockchain technology
As Blockchain continues to prove its significance to the modern world, a growing number of financial companies worldwide are deciding to make the switch. Wells Fargo & Company, another leading fin-tech company in the United States, also announced its plan of launching a project that aims to develop DLT (distributed ledger technology) –based platform. The platform would be used in processing international payments’ internal book transfers using digitized money.
In September, this leading payments and tech company Mastercard, announced a partnership with R3, intending to develop a Blockchain-based payment solution.