Tech giant IBM is partnering with Stronghold, a financial institution building an asset-agnostic global payment and trade ecosystem. Stronghold has over 20,000 traders on its cryptocurrency trading platform built on the Stellar network – the only trading platform and crypto exchange built on Stellar that settles in USD. The exchange allows institutions to send, receive and trade Bitcoin, Ethereum and Lumens.
Stronghold has also introduced a stablecoin, the Stronghold USD token, which is pegged 1:1 to the US dollar, with reserves held by a state-chartered trust company. The goal is to use the stablecoin as a new liquidity tool for real-time foreign exchange and international settlement.
Stellar’s blockchain protocol will issue and transact Stronghold USD, as Stronghold enables banks to issue credit into transactional networks.
“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.”
IBM will explore new ways to use Stronghold USD and expand its global business for blockchain-based enterprise solutions.
“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 move is designed to bridge legacy systems with cryptocurrencies and their underlying blockchain technology, reinventing money flow and speeding up settlements. The Stellar ecosystem allows for immediate exchangeability, anywhere in the word, with low transaction costs and fewer intermediaries than traditional bank transfers.
IBM’s goal is to transform traditional banking protocols, using blockchain-based solutions to modernize the multi-trillion-dollar industry of cross-border payments. The company is particularly focused on using the IBM Blockchain Platform to generate solutions for real-time international payments.
Stronghold USD tokens are not yet available for retail customers but may be available in the coming months.
Stellar is decentralized, connecting banks, payments systems and people around the world. The core validators are run by community members external to Stellar.org. The integration of the stablecoin on the Stellar network is expected to support digital assets and efficiently scale-up to multiple fiat currencies.