IBM Corporation has joined the American startup Stronghold to create the USD Anchor stablecoin on the Stellar blockchain. The next “stable” cryptocurrency pegged to the US dollar will be launched this year.
The new project seeks to ensure the interaction of digital transaction networks with fiat currency within the blockchain. Thanks to this, there is no need to convert fiat funds into cryptocurrency, and then back, when making cross-border payments. Thus, by tokenizing real currency, we can ensure fast cross-border payments, but avoid the risks of exchange rate volatility that scare away investors. The company plans to launch the new technology by the end of the year. IBM wants to provide investors with use cases and demonstrate the potential of the token in international transfers and multi-currency transactions. The company expects that USD Anchor will be used not only for the quick transfer of assets to crypto platforms by traders, but will become a convenient financial instrument due to its pegging to the US dollar in a one-to-one ratio and the stability of the latter’s exchange rate.
According to the developers of stablecoin, a fiat-backed token opens up wide access to the global circulation of funds.
Stronghold’s dollar reserves will be stored in the account of the trust company Prime Trust. The Federal Deposit Insurance Corporation (FDIC) will guarantee the safety of your funds.
The concept of stablecoin, tokens tied to world currencies - the dollar and the euro - has been repeatedly criticized. However, attempts to develop a stable cryptocurrency do not stop. Many people compare the new IBM project with the notorious Tether (“virtual dollars”, USDT and EURT tokens). A scandal began around Tether due to doubts about backing the token with real dollar reserves.
IBM focuses on the main difference and advantage of the USD Anchor token:
- attraction of a registered trust
- FDIC insurance coverage, which provides 100% backing of tokens in dollars and confidence for investors in the safety of their funds
- FDIC insurance covering deposits up to $250,000
Larger deposits are covered in case if necessary, by several partner banks. Prime Trust itself works in close partnership with federally insured banks Pacific Mercantile and Bank of America. It recently successfully passed an audit and confirmed its license.
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