IBM Is Testing A Cryptocurrency Pegged To The US Dollar
IBM on Tuesday said it is experimenting with a new cryptocurrency that is directly pegged to the US dollar, in an attempt to avoid price volatility associated with other digital currencies.
The tech giant is partnering with startup Stronghold to launch a “stablecoin” that will serve as a “tokenized representation” of the US dollar. Consumers will be able to exchange their dollars for Stronghold coins on a 1-to-1 basis, and all cash exchanged in transactions will be deposited in banks insured by the Federal Deposit insurance Corporation.
Jesse Lund, Vice President of global blockchain market development at IBM, stressed that a stable coin is a digital token that has low price volatility because it is tied to the underlying Fiat currency.
Leading cryptocurrencies such as Bitcoin and Ethereum are not regulated by any government or tied to any Federal currency. After unprecedented growth in 2017, bitcoin fell from a record high of over $ 19,000 last December to around $ 7,300 as of Tuesday amid growing government control and fraud concerns.
Lund said stable coins are a safer option than other cryptocurrencies because they are not so subject to exchange rate volatility or tied to an unregulated anonymous market.
A leader among companies looking for business applications for blockchain technology, IBM said on Tuesday it will collaborate with Columbia University in new York to launch a jointly managed Blockchain and transparency center.
