IBM is all set to explore a new digital asset on its blockchain platform. Designed and published by Stronghold, the new stable coin will be insured by the Federal Deposit Insurance Corporation, an agency created by US Congress. This bold move by the tech heavyweight is aimed at making cryptocurrencies more acceptable and trustworthy and is set to highlight the importance of blockchain technology.
A New Dollar-pegged Currency
Currencies pegged to the US dollar have had a controversial past. Tether, a stable coin connected to the US dollar, has faced several allegations of price manipulation.
What makes the Stronghold coin unique is that it is federally insured by a New York-based commercial financial institution — Signature Bank. To note, Stronghold, the company behind this new coin, is an asset-agnostic ecosystem facilitating global trade and payments.
This infrastructure will be built upon the Stellar Network, the native network of Stellar Lumens coin (XLM), to transact in the new stable coin. Signature Bank will have a custodial relationship with the new blockchain protocol, while the publisher will provide liquidity access on its institutional exchange services.
IBM will help the publisher in exploring uses of its stable coin within business networks on blockchains operated on the IBM Blockchain Platform. The two entities will experiment with the coin to gain safer, quicker and more efficient transfers of funds.
Can Stable Coins Transform the Crypto Space?
The use of stable coins could help in bringing more liquidity to international payments in real time. Moreover, banks could be more likely to issue credit in digital ecosystems as there are no violent fluctuations in the currency prices, i.e., limited volatility in prices.
Sean Bennett, Stronghold 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.”
He further noted that stable coins could provide seamless access to all currencies, helping improve the global money circulation.
An IBM spokesperson commented on the collaboration, saying:
“IBM is endorsing it and has consulted with Stronghold on the technology. IBM will be taking this to a broader range of clients moving forward. IBM is a partner of Stellar, the network on which this work is running.”
He called it a milestone for the company, which has supported the token economy upfront.
IBM to Support a Stable Coin Insured by US Congress Created Agency was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.