IBM Is Helping Launch a Price-Stable Cryptocurrency Insured By the FDIC

The token will be backed one-for-one with U.S. dollars held at a Nevada-charted trust company called Prime Trust, which in turn will deposit the cash at banks insured by the Federal Deposit Insurance Corp. IBM is partnering on the initiative with Stronghold, and said it will explore various use cases for the token with its financial institution clients.

"What we really want to do is enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks," Jesse Lund, IBM's head of blockchain services for financial institutions, told CoinDesk.

The startup will issue the digital asset, which represents a claim on U.S. dollars deposited with Prime Trust and ultimately insured by the FDIC, the U.S. agency created in 1933 whose sticker on the doors of bank branches has long reassured Americans their money is safe.

The first use cases IBM will pursues will be around cross-border payments in the form of remittances and small-scale foreign exchange transactions.

The stablecoin is now available to institutional clients and IBM aims to "Put it to use as quickly as possible," Lund told CoinDesk, adding,.

In contrast, IBM envisions the Anchor being used by financial institutions for a host of more mainstream use cases, starting with payments, but moving into areas like food tracking, global trade and supply chain and so on.

"What we envision is a network that has multiple different asset classes living on it. You could have digital euros, digital dollars, digital pounds - and they are all really kind of running on the same networks," Lund said.

Back then IBM announced it had. been working with the Stellar protoco.

Since then IBM has been busy expanding this into a larger production ready network.

The reason IBM has partnered with Stellar is because its team has experience in cross-border payments and the protocol scales well with no mining in its consensus system, Lund said.