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IBC is a standard that defines how blockchains can send and receive messages to each other. This allows for the creation of a network of blockchains that can interact with each other.
You can use the IBC protocol as a building block to create your own custom protocols on top of it, but you can also use existing protocols like the ICS-20 token transfer protocol. In the following sections, we will explain how both of these work. Using CosmWasm for this gives you a key advantage over writing a custom Cosmos SDK module in Go: you can easily deploy and upgrade your contract without having to go through a full chain upgrade (on multiple chains, mind you).