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Stronghold, a US based financial service provider and International Business Machines (IBM) have announced a collaboration that will a digital coin that will be paged to the use dollar; the Stronghold USD. According to the news released Tuesday, July 17, the new entrant will be riding on the Stellar Lumens ecosystem.
To access the new digital Coin, all you need is deposit your USD with the Nevada based Prime Trust bank which has already partnered with Stronghold USD. The issuance of the new tokens is based on 1:1 ratio. This is the latest move to peg digital coins with assets like gold or currencies in a bit to increase crypto usability by individuals and companies.
The US based financial service provider is poised to give the cryptocurrency market additional stability by cushioning volatility. This is a big boost for the crypto market as the initiative seeks to avoid a market crash like the one experienced earlier this year. According to the Stronghold firm, investors in the retail sector will get access to the tokens in a few months time:
If the partnership goes according to plans, Lund adds that stable coins and blockchain adoption will give the consumer, retailers and the supplier’s access to safe, affordable and secure means of payments that will offer better value proposition compared to traditional plastic cards and fiat.Stronghold Role in Transactions
Expectations have been high that a New York based bank, Signature was the natural choice for the venture only for the bank to rescind its decision and a deal was inked between IBM and Prime Trust which is a fully insured outfit by the Federal Deposit Insurance Corp.
The goal, according to Lund is to create a link between banking institutions and their clients for ease of settlements using virtual currencies and traditional legal tender. Lund adds that:
Simply put, Stronghold will play the anchor role between the Stellar ecosystem by issuing digital assets that are a representative of the US dollar through their partner banking establishment, Prime Trust that is FDIC compliant. This is the first step towards a seamless management of digital assets. This will make it easy to move funds across the borders.
Tokenization of traditional money means fast transaction speeds in a frictionless environment to eradicate the merchant volatility risks. It will also shift traditional transactions to the micro payment level that will boost small scale start ups and add confidence to the institutional investor.
According to critics, the project resembles Tether, a stable coin anchor, which has turned controversial. However, the new project appears to have nothing to with the USD reserves. The good part is that Prime Trust is fully audited and covered by FDIC and this will give the investor additional trust and confidence.
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