IBM has partnered with fintech startup Stronghold to launch a stablecoin pegged to the US Greenback. The cryptocurrency shall be tied to government-backed fiat deposited at banks lined by the Federal Deposit Insurance coverage Corp (FDIC).
One other Stablecoin within the Making
A fintech startup referred to as Stronghold is launching a brand new cryptocurrency pegged to the US Greenback, studies CNBC. “Stronghold USD”, as the brand new cryptocurrency is named, shall be backed one-for-one with US that are held by blockchain-focused asset administration firm Prime Belief. The charted agency will deposit the cash at banks that are insured by the FDIC.
IBM is partnering up with the fintech startup and can discover methods of serving to monetary establishments and banks course of funds faster and extra securely.
The undertaking is likely one of the few makes an attempt to scale back the volatility which is commonplace throughout the cryptocurrency market. Stronghold’s CTO, Sean Bennett, mentioned in a latest press launch:
The method for seamlessly managing and buying and selling belongings of any type from digital to conventional currencies, must evolve as monetary establishments are looking for methods to interrupt into new asset lessons like cryptocurrencies […] Asset-backed tokens can present seamless entry to all currencies, bettering the worldwide motion of cash. We’re honored to work with IBM to discover new methods to make use of Stronghold USD inside.
Stronghold’s stablecoin shall be underpinned by the Stellar community, which was developed by former Ripple govt Jed McCaleb.
Good or Unhealthy Information?
Stablecoins are seen as an try to dampen the volatility within the cryptocurrency market by pegging them to current, extra steady belongings, primarily tokenizing the latter.
Nevertheless, regardless of the soundness that they pose, specialists have additionally revealed a good variety of drawbacks to the idea, together with the inherent dependency on the soundness of the underlying asset, in addition to the necessity to belief a centralized third social gathering.