IBM has just announced a new partnership with a Fintech start-up called Stronghold in an aim to become more involved in the world of cryptocurrency.
Whilst the tech giant actively involves itself in blockchain technology, until now they have not shown a particular interest in cryptocurrency. In conjunction with Stronghold, they aim to explore the possibility of using Stablecoin which would be pegged to the US Dollar so it would be able to mitigate volatility.
According to the official press release, the cryptocurrency will be called Stronghold USD and will be backed by the US Dollar. The reserves will be held by a blockchain focussed asset manager, Prime Trust.
IBM will then experiment with virtual currencies to explore the potential of the technology as well as seeing how it could be used to help banks and other financial entities, without taking too much of a risk.
Whilst Stablecoin is supposed to be immutable to the volatility that other cryptocurrencies experience, there is a bit of controversy around the way that it is tethered. There are some that believe it was used to manipulate the price of Bitcoin during its bull run towards the end of 2017.
The news of IBM’s foray into the crypto world may have been responsible for an enormous spike in the value of BTC- as much as $20 billion in 24 hours. A single BTC skyrocketed to over $7000 with around 9% gains on a day to day basis. At the time of writing, Ethereum, the world’s second largest coin had reached an important hurdle of $500 per Ether. Ripple has also seen increases of around 6.5% and is trading at $0.5100.
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