As part of its new project, IBM has announced a partnership with Stronghold, a crypto-involved fintech startup. The goal of the partnership is the exploration of stablecoin, which is tied to a currency backed by the government.
Stronghold introduces Stronghold USD
A financial institution from San Francisco, Stronghold, recently created and launched an asset-backed token on Stellar’s network. Those interested in buying the Stronghold USD cryptocurrency, backed by the US dollar, can deposit the dollars in Prime Trust, a bank based in Nevada, which has partnered up with Stronghold.
Stronghold identifies the new coin’s potential uses in business networks involved with blockchain technology. To do this, they have entered a partnership with IBM, also interested in testing the crypto.
The plan is to explore this new technology and find practical uses for banks and financial institutions, which may choose to implement it in their business practices. In the end, there is hope that the use of this coin may allow safer, more efficient, and faster transactions.
Despite the fact that the stablecoin is to be volatility-proof, a certain amount of controversies regarding another stablecoin, Tether, have appeared recently.
There is a belief that Tether is being used by the authorities for crypto market manipulation. The theory goes that Tether can manipulate the price of Bitcoin, which pulls the entire market whenever it changes its behavior. Some even believe that it was Tether that was responsible for the crypto price jump that occurred at the end of the previous year.
Stablecoin brings easy access to XLM
This new development regarding Stronghold USD is seen as a positive change, that will now open a gateway for investors who wish to invest directly into XLM. The biggest problem so far was how to reach Stellar quickly. Many exchanges are known for offering the purchase of Bitcoin (BTC) and Ethereum (ETH) via USD. However, investors had to take a long way around if they wanted access to Stellar’s coins and network.
First, they would have to purchase BTC or ETH, and then convert these coins to XLM tokens. The process required time, several wallets, and similar difficulties. However, through the use of Stronghold USD, this won’t be necessary anymore and the investors will be able to buy XLM without additional steps. Of course, the same will be true for converting Stellar coins back to dollars.
The new process is expected to be particularly helpful when it comes to international transactions. This is believed to lead to a significant boost of XLM’s use since more parties will have easy access to the coin.