Stronghold, a leading financial institution, has teamed up with tech giant IBM to run Stronghold USD on IBM blockchain platform.
The Stronghold USD is an asset-based token whose reserves are held by a regulated and state-chartered trust company. Stronghold is also the only venture-backed USD anchor on an open-source protocol for value exchange called Steller Network.
The financial firm will use Steller’s blockchain protocol for transaction of its token and provide access to liquidity via its institutional exchange services.
With IBM partnership, Stronghold aims to help finance industry achieve faster, safer, and more efficient transaction processing and money transfer all around the global economy.
“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,” said Stronghold’s co-founder and CTO, Sean Bennett.
“Asset-backed tokens can provide seamless access to all currencies, improving the global movement of money. We’re honored to work with IBM to explore new ways to use Stronghold USD within.”
Stronghold USD can be used as a new liquidity tool for real-time foreign exchange and international settlement, the company said. Banks can use it for issuing credit into transactional networks and trade ecosystems.
“The digitization of real-world assets using blockchain can dramatically transform many forms of financial transactions conducted around the world,” said Jesse Lund, global vice president of IBM Blockchain.
“New types of fiat-backed instruments, like Stronghold’s USD token, have the potential to improve the backbone of international banking operations and payments, giving banks an easier way to integrate with public blockchain networks without significant changes to their core banking and compliance infrastructure.”
The digital coins like Stronghold USD are different from cryptocurrency. The exchange rates of cryptocurrencies can wildly swing up and down, as seen last year with bitcoin. But it is not the case with Stronghold coins. Its value will always mirror the US dollar.
“Stronghold’s USD anchor is a cornerstone piece of bringing the Stellar network to mass market adoption,” said Stellar co-founder and crypto pioneer Jed McCaleb.