IBM has partnered up with Stronghold and launched the stable coin Stronghold USD whose every token is backed by one US Dollar. The token will be used on the IBM’s blockchain platform whereas the tokens will be issued and transact on the Stellar network.
International Business Machines (IBM) is backing a new stable coin termed Stronghold USD which is launched on Stellar blockchain platform. In partnership with the financial institution Stronghold, the digital dollar is expected to run in parallel to the physical cash on the blockchain platform of IBM.
The buyers of the coin will be depositing their dollars with the partner bank of the company i.e Nevada-based Prime Trust for which Stronghold will issue the tokens in a 1:1 ratio.
According to Jesse Lund, the Vice President of Global Blockchain in IBM believes stablecoin is the best of both the world in the sense that while it has the attributes of a cryptocurrency that makes it an attractive option for certain cases, at the same time it doesn’t overlook the regulatory oversight that is present in the financial institutions.
He explained,
“We’re really keen to explore the use of this — we’re calling this stable coin — which is essentially a fiat currency-backed digital asset or digital currency of sorts that’s actually backed by real money held in deposits at a chartered bank in the US.”
Given the high volatility of the crypto market, stablecoins provide stability. Lund also shares,
“With bitcoin and traditional cryptocurrencies, there’s no regulating body — they are purely autonomous types of networks — but with stable coins, you actually do have a regulatory agency in place still, because the issuer of the asset is in this case a regulated financial services entity.”
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The purpose behind Stronghold USD token is to use it among businesses like asset managers, financial institutions and multinational corporations that will be made available to the retail customers in the coming months.
Lund further shared,
“IBM will explore use cases with business networks that we have developed, as a user of the token. We see this as a way of bringing financial settlement into the transactional business network that we have been building.”
According to him, as the applications that use stablecoins and blockchain gets mainstream, global suppliers and merchants will become a safer, faster and cheaper alternative to options like credit cards, cash among others.
Talking about the use of this token, Tammy Camp, the co-founder and CEO of Stronghold says,
“The token allows folks to do payments, foreign exchange between companies in a very seamless and frictionless and more secure way. It enables people to be able to trade that token with other assets and other tokens as well.”
The cryptocurrency trading platform of Stronghold is built on the Stellar network that currently allows the buy, sell and trade of Bitcoin (BTC), Ethereum (ETH), and Stellar (XLM). Stronghold will further use the blockchain protocol of stellar to issue and transact this stablecoin.
It will further provide liquidity through its institutional exchange services and custodial partnership with the trust company.
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