IBM to Back Stellar-Based Stablecoin Project "Stronghold USD"

In a move aimed at ending the notorious volatility associated with cryptocurrencies, technology giant IBM announced it will back a stablecoin project on July 17, 2018.Stablecoin Aimed For Institutional Use.

According to Reuters, IBM Corp will enter a partnership with U.S.-based Stronghold, a cryptocurrency payments company aimed at institutions, to create the "Stronghold USD," a stablecoin with each unit pegged to the U.S. dollar.

Stronghold launched on July 17, 2018, and is built on the Stellar blockchain.

Initially, the Stronghold tokens will be available for use among businesses, such as hedge funds, multinational corporations, and financial institutions, with retail usage planned in the following months.

The relatively obscure Stronghold touts itself as an "On and off-ramp" to the Stellar blockchain, aiming to provide instantaneous settlement and payment options to users of the Stellar Decentralized exchange, as stated on its website.

Jesse Lund, vice president of IBM's global blockchain division, told Reuters the project is ready for operations as the engineering work has been completed.

He added IBM will develop and explore several use-cases with existing business players and networks, propelling the use of the Stronghold stablecoin for conducting financial settlements in IBM's transactional business.

IBM is aiming to deploy blockchain technology to modernize the multi-trillion-dollar industry of cross-border payments and correspondent banking.

While projects like Tether command a $2.7 billion market cap, its background is controversial, and claims are unaudited, leading to cryptocurrency users regarding the project as a short-term gimmick instead of a worthy project.

The presence of a notarized bank and global technology player sets Stronghold USD apart in this regard.