IBM has joined hands with a Stronghold, a U.S. based financial services provider in backing a new cryptocurrency pegged to the U.S. dollar. The Stronghold USD was launched on the Stellar blockchain platform on Tuesday. Blockchain is used by crytocurrencies and is managed by a network of computers under a shared database that are connected to the internet.
The idea is that it should provide stability to the otherwise volatile sector. In exchange of dollar bills with Prime Trust which is company’s partner bank, buyers will be issued tokens at a ratio of 1-to-1.
The prevalence of the practice of pegging stable coins to strong currencies or assets like gold has caused the issuers to widen the use of digital currencies that are unstable. After shooting over 1300 % last year, the popular token, Bitcoin has seen a 55% downfall until now.
Tokens will be open for retail customers soon and the Stronghold USDs will find use among financial institutions, asset managers, MNCs; according to the company. Jesse Lund, IBM’s vice- president has stated that the company will find uses of the same amongst the business networks and channels IBM has created with the aim of bringing stability. He further added that the token’s engineering has been completed.
According to Lund, cash, credit, debit cards and wire transfers will be less preferred by businessmen, consumers and global suppliers once the applications using blockchain and stable coins become more conventional.
Tammy Camp, founder and Chief Executive of Stronghold discussed the advantages of the token which include smooth and safe payments and exchanges between companies globally stressing on the flexibility of usage of the token which can be traded easily with other tokens and assets.
With the opening of Columbia- IBM Center for Blockchain and Transparency, students will get the opportunity to explore intership options and joint researches with IBM after a partnership between Columbia University and IBM was announced on Tuesday.