IBM Partners Stronghold, Stellar and Ripple to Launch Stablecoin Backed By FDIC-Insured Banks – Cryptocurrency News Today

Technology Giant IBM just announced that it is partnering with Stellar, Ripple and a startup called Stronghold to launch USD Anchor—stablecoins or coins that are pegged to fiat currency. Anchors are technologies that act as a bridge connecting existing fiat currencies like the U.S. dollar and the Stellar network where all financial transactions take place as credits issued by trusted parties.

This partnership is an attempt to create a cryptocurrency with the value pegged to the U.S. dollars (USD) and stored banks by a Nevada-charted trust company called Prime Trust at any Federal Deposit Insurance Corp (FDIC)-insured bank. The USD Anchor will be powered by Stellar’s blockchain technology and will also use its conformity mechanism to verify and validate transactions.

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Stronghold to Enable Cross-Network Transactions

IBM’s partner Stronghold has secured $3.3 million in seed funding for its Stellar Network-based trading platform from Freestyle Capital – a ventures company. It startup’s goal is to “enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks.” Jesse Lund, IBM’s head of blockchain services told newsmen.

IBM and Stronghold aim to make it easier for businesses making use of cryptocurrencies to fully utilize the full potential of the technology. Stronghold believes that the inherent volatility of digital currencies is a major factor why traditional financial institutions stay away from the technology, coupled with the lack of comprehensive moderating bylaws and regulations governing the sector.

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The partnership wants to establish a network whereby digital fiat currencies can be used for transactions and bridge the gap across multiple blockchain. “What we envision is a network that has multiple different asset classes living on it. You could have digital euros, digital dollars, digital pounds – and they are all really kind of running on the same networks.” Implementing this idea could potentially expand the use of cryptocurrencies beyond just trading in the cryptocurrency industry.

The Stellar Network

Stronghold will be tethered to the Stellar network which IBM is also a member, Stellar is a network infrastructure which was designed to handle decentralized transactions. Stronghold’s USD Anchor will act as an entrusted entity on the Stellar network to hold deposits and issue out credits.

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Stronghold’s co-founder and CTO, Sean Bennett, said in a press release that “The process for seamlessly managing and trading assets of any form from digital to traditional currencies, needs to evolve,” and that, “Asset-backed tokens can provide seamless access to all currencies, improving the global movement of money.”

 


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