IBM Backed Stronghold Launches US Dollar Pegged Cryptocurrency
Stronghold, a global payment and trading platform provider, announced the launch of a stable coin named “Stronghold USD.” The cryptocurrency, pegged to the US dollar on a 1:1 ratio, is built on Stellar Lumens’ (XLM) blockchain. The San Francisco based startup also disclosed a partnership with IBM to study possible business applications based on the stablecoin.
There cannot be a better time to introduce a stable coin in the cryptocurrency market, which is seeing wild swings. Bitcoin has already lost nearly 30% of its value from the peak level of about $20,000 recorded in 2017. The price swings are keeping large investors and funds away from the market which needs fresh investments.
The availability of stable coins such as Havven, MakerDao, Tether, and now Stronghold USD would instill confidence in the minds of large investors as well as firms which can use it for global fund transfers and other domestic remittances.
Sean Bennett, Stronghold’s co-founder and CTO said
“The process for seamlessly managing and trading assets of any form from digital to traditional currencies, needs to evolve as financial institutions are seeking ways to break into new asset classes like cryptocurrencies. Asset-backed tokens can provide seamless access to all currencies, improving the global movement of money. We’re honored to work with IBM to explore new ways to use Stronghold USD within.”
The Stronghold USD will be built on Stellar Lumen’s reliable and fast blockchain network. The greenback backing the cryptocurrency will be held in a Prime Trust, a “technology-driven trust company” having membership in the distinguished Nevada Trust Company Association and American Bankers Association.
The team behind Stronghold USD will target B2B marketplace for “financial institutions, multinational corporations, and asset managers” who are interested in entering the crypto space.
IBM’s interest in the project can be understood from the fact that it is already working on more than 400 blockchain projects and wish to gain further market share in the field of blockchain technology. In May 2018, the company hogged limelight by announcing its plans to employ near 1800 blockchain professionals. On July 7, Dutch firm Koopman Logistics revealed that its intention to use IBM’s blockchain for their supply chain and automotive services.
While partnering Veridium Labs, a carbon credit company, IBM chose to use Stellar’s blockchain. At that time, the duo issued a corporate cryptocurrency named Verde token, which is useful for companies looking for a way to offset their carbon footprint. According to Jed McCaleb, co-founder of Stellar, the partnership will further improve the chances of mass adoption of Stellar.
Likewise, Bridget van Kralingen, IBM’s VP of Global Industries, Platforms, and Blockchain, said
“There’s this tremendous opportunity to make blockchain payments feasible, especially for cross-border. What is great about this is they are just basically digital dollars—digital fiat currency.”
The release of Stronghold USD has increased the competition to stable coins in the cryptocurrency sector. Some of the stable coins like Tether are surrounded by controversies, while others have certain drawbacks. So, the launch of a stable coin which can satisfy the needs of industry is a welcome development that will further encourage the migration from traditional systems to efficient cutting-edge financial technologies.