New US dollar-pegged stablecoin launches, IBM begins exploring use cases
The new coin, designed for business use, may become available to retail customers in the coming months.
A new cryptocurrency, purportedly backed 1:1 by US dollar deposits, has officially launched this week.
The project, Stronghold USD, utilizes Stellar Lumens’ blockchain. The stablecoin is the result of a partnership agreement between US-based financial services provider Stronghold and global technology giant IBM.
Buyers wishing to purchase the coin will need to deposit US dollars with Stronghold’s Nevada-based partner bank Prime Trust. Tokens will be issued at a ratio of one-for-one, according to a report released by Reuters.
Stronghold USDs have been designed for use among businesses, such as financial institutions, multinational corporations, and asset managers, the company said.
Retail customers may be allowed to purchase these stablecoin tokens in the coming months.
Through the use of coins such as Stronghold USD, suppliers, merchants and customers worldwide will gain access to more cost effective, agile and secure alternatives to cash, credit cards, debit cards and wire transfers.
“The token allows folks to do payments, foreign exchange between companies in a very seamless and frictionless and more secure way,” Stronghold founder and chief executive Tammy Camp said in an interview.
“It enables people to be able to trade that token with other assets and other tokens as well,” she added.
Thousands of cryptocurrencies have launched over the past few years. However, one in particular, Tether, has a similar purpose, in that it is reportedly pegged to the value of the US dollar, to help encourage stability.
In late June, Tether reportedly issued 250 million new tokens. This was the third release of tokens by Tether in a span of just three months. As such, Tether has become a subject of scrutiny among cryptocurrency followers.
A research report released last month, using algorithms to analyze blockchain data, suggests that Tether may have been used to influence the price of bitcoin and other cryptocurrencies during the recent price explosion. However, the report cannot definitively prove price manipulation. Patterns suggest that exchanges with support for Tether saw prices of alternative coins increase more than on exchanges that did not support Tether.
IBM exploring opportunities for Stronghold USD
The computer company has been using the Stellar network to assist with cross-border payments since 2017.
IBM’s solution processes live transactions across 12 different currency corridors between the Pacific Islands and Australia, New Zealand and the United Kingdom, with the goal of expanding these capabilities.
“IBM will explore use cases with business networks that we have developed, as a user of the token,” IBM vice president of global blockchain Jesse Lund said in a recent interview. “We see this as a way of bringing financial settlement into the transactional business network that we have been building.”
IBM also revealed that it has just teamed with Columbia University in New York to open the Columbia-IBM Center for Blockchain and Transparency. Students will be able to obtain IBM internships and share research.
You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.
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