IBM is backing a new cryptocurrency pegged to the U.S. dollar. The new coin is called ‘Stronghold USD’ after its creator, fintech startup Stronghold. The move is aimed at instilling more trust in cryptocurrency and increasing its usefulness based on the technical advantages of blockchain.
As for now, Stronghold USDs is for businesses, such as financial institutions, multinational corporations, and asset managers, the company said. In the coming month, the tokens should be made available to retail clients. “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,” said Jesse Lund, IBM’s vice president of global blockchain, said in an interview.
As applications that use blockchain and stable coins become more mainstream, Lund said, merchants, consumers, and global suppliers will get cheaper, faster and safer alternatives to cash, credit cards, debit cards and wire transfers.
The Token was lunch today, and it is running on the Stellar blockchain network. Stronghold value will be a 1-to-1 ratio to the US dollar. Coins pegged to the USD or any fiat are called stablecoins. Their primary purpose is to protect crypto investors from the extreme volatility of the cryptocurrency market.
“The token allows folks to do payments, foreign exchange between companies in a very seamless and friction-less and more secure way,” Stronghold founder and Chief Executive Tammy Camp said in an interview.