Tech giant IBM partnered with US-based Stronghold, a financial services company, to work on a cryptocurrency pegged to the US dollar. The new stable coin is aimed to bring some stability in the volatile crypto space.
Stronghold USD, as the cryptocurrency is called, was launched on Tuesday on the Stellar blockchain. Potential buyers will have to deposit fiat money with Stronghold's partner bank – Prime Trust – so that the company could issue the coin with the 1:1 ratio.
The new cryptocurrency is meant to be used by corporate entities like financial institutions, corporations, and asset managers. In the future, the coins will also become available to the general public.
Jesse Lund, IBM’s VP of global blockchain, said:
“The engineering work has been done on this token and we have seen a little bit of the early release of it.”
“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,” he added.
Stronghold founder and CEO Tammy Camp explained that the token allows entities to conduct payments and Forex operations between companies in a secure and seamless manner.
“It enables people to be able to trade that token with other assets and other tokens as well,” she stated.
Founded in 2017, Stronghold is a financial firm focused on an “asset-agnostic global payment and trade ecosystem.” It has a cryptocurrency trading platform built on Stellar, where users can buy and sell Bitcoin, Ethereum, and Lumens. The new Stronghold USD coin is also based on the technology provided by Stellar. Last year, Stellar partnered with IBM to develop a blockchain platform to support money transfer in the South Pacific region.
Last week, Coinbase announced that it might add Stellar’s cryptocurrency Lumens, XLM, along with four other coins on its platform.