IBM is reportedly looking into a cryptocurrency that’s tied to the U.S. dollar, which will rely on a platform developed by Stellar.
IBM Experiments with Stronghold
The American multinational technology company is turning its attention to cryptocurrency. Teaming up with fintech startup Stronghold, IBM is hoping to use a stablecoin.
The stablecoin, Stronghold USD, is backed by the Federal Deposit Insurance Corporation (FDIC), according to the tech company. In a report from CNBC, IBM is going to see how it can use the stablecoin to aid banks to process payments faster and cheaper.
With the aid of stablecoins, however, it hopes to reduce the volatility that is often linked to cryptocurrencies. Tether is a well-known stablecoin backed by the U.S. dollar. Notably, though, it has received much criticism in recent months. This is due to the fact that it has been accused of boosting Bitcoin’s price up, particularly during its 2017 price surge.
Additionally, there was speculation that Tether didn’t have enough U.S dollar reserves to back its coins in circulation. However, a June report attested that it did have enough.
According to IBM, Stronghold’s stablecoin will rely on the platform developed by Stellar. It will use Stellar’s blockchain protocol to issue and transact Stronghold USD.
Embracing the Blockchain
Prior to turning its focus on the use of stablecoins, the technology company has been embracing the blockchain.
So much so, that in March, it was reported that IBM was working on 400 blockchain projects with 63 clients. These included the likes of Walmart, Visa, Nestle, and HSBC.
At the time, Jim Kavanaugh, IBM chief financial officer, said:
For us, blockchain is a set of technologies that allow our clients to simplify complex, end-to-end processes in a way that couldn’t have been done before.
Other areas where IBM is working in include the supply chain industry. Last December, Walmart, JD.com, IBM, and Beijing-based Tsinghua University came together to launch the Blockchain Food Safety Alliance in China. Add to that its success of completing a trial using the technology to track and trace a cargo supply chain with Pacific International Lines (Pte) Ltd and port operator PSA International in March. It has also teamed up with Maersk and Agility, a global logistics provider, to provide secure and efficient methods for tracking container shipments with the blockchain.
Today it was also announced that it was teaming up with Columbia University to launch a new center devoted to research, education, and innovation in blockchain technology, as well as data transparency.
What do you think of the IBM’s experiment with a stablecoin? Let us know in the comments below.
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