IBM Partners With FDIC-Insured Cryptocurrency

By Paul Ausick Updated Jan 11, 8:54PM EST · Published Jul 17, 11:25AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

A startup cryptocurrency platform named Stronghold is getting some big-time help launching a new stablecoin from International Business Machines Corp. (NYSE: IBM). The Stronghold USD is a U.S.-dollar-backed token that is also FDIC-insured by a New York commercial bank.

IBM is a member of the same Stellar network as Stronghold, a network infrastructure designed to handle decentralized payments. Stronghold USD is an anchor on that network; that is, an entity entrusted to hold deposits and issue credits into the Stellar network for those deposits. Anchors are, essentially, a bridge between existing fiat currencies like the U.S. dollar and the Stellar network where all money transactions occur as credits issued by anchors.

Stronghold’s collaboration with IBM calls for figuring out how to use Stronghold USD within IBM’s own Blockchain Platform. In a statement cited by VentureBeat, IBM said:

IBM is endorsing [Stronghold USD] and has consulted with Stronghold on the technology. IBM will be taking this to a broader range of clients moving forward. IBM is a partner of Stellar, the network on which this work is running. Stronghold USD is a new type of digital instrument that provides the foundation for transforming real-time domestic and international payments, backed by the U.S. dollar. This is the next milestone in IBM’s support of the token economy.

[nativounit]

Stronghold chief technology officer, Sean Bennett, said in a statement:

The process for seamlessly managing and trading assets of any form, from digital to traditional currencies, needs to evolve as financial institutions are seeking ways to break into new asset classes like cryptocurrencies. Stable coins can provide seamless access to all currencies, improving the global movement of money.

Because stablecoins like Stronghold USD are backed with real assets, users may feel more confident using them because their value is not subject to the wild price swings we all read about with bitcoin and other cryptocurrencies. Stablecoins represent ownership of real assets but may be more fluidly exchanged between counterparties and result in virtually instant transaction settlement, a process that often can take 60 days to complete.

[recirclink id=477595]

[wallst_email_signup]

About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.