International Business Machines or IBM has partnered with financial technology startup Stronghold to launch stablecoin, a cryptocurrency that's pegged to the US dollar, on Stellar blockchain Network.
Stronghold, acting as an anchor to the Stellar network, will issue the digital asset "Stronghold USD." It will be backed with U.S. dollars held at blockchain-focused asset manager Prime Trust, which will then deposit the cash at banks insured by Federal Deposit Insurance Corp.
The stablecoin is tied to an existing government-backed currency with a view to reducing the volatility related to digital currencies. It will rely on the platform developed by Stellar, co-founded by Jed McCaleb, a former Ripple executive.
IBM said it will experiment with Stronghold to explore various uses for Stronghold USD within blockchain business networks on the IBM Blockchain platform. They will explore ways of helping banks and other financial institutions to use the Stellar network for processing payments faster, safer, and more efficiently.
Jesse Lund, IBM's head of blockchain services for financial institutions, told CoinDesk, "What we really want to do is enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks."
IBM already was in partnership with Stellar, and had been working with the Stellar protocol and its native token, lumens, as a bridge currency between money transfer operators in some South Pacific island nations.
Separately, IBM partnered with Columbia University to establish a new center for research, education, and innovation in blockchain technology and data transparency. The Columbia-IBM Center will combine cross-disciplinary teams to explore key issues related to the policy, trust, sharing and consumption of digital data when using blockchain and other privacy-preserving technologies.
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