IBM Signs 6 Banks to Issue StableCoins
Today I have interesting news to share when it comes to banking institutions moving closer towards the crypto space. According to Coindesk, IBM announced on Monday that six international banks have signed letters of intent to begin issuing stable coins that are backed by fiat currency.
These stablecoins are on WorldWire, an IBM payment network that uses the Stellar blockchain network. The great thing about this development is, the network helps regulated institutions move money and value across borders in a more quick, cheap, and effective way than the existing legacy banking system.
Who are the banks involved? While we don’t know who all six of them are, the three we do know are Phillippines-based RCBC, Brazil’s Banco Bradesco, and Bank Busan of South Korea, the rest will soon be named. While the banks are currently waiting for regulators, the network went live on Monday. There is, however, one stablecoin that is running on the WorldWire network called Stronghold, which is a US dollar backed token created by a startup based in San Francisco.
Jesse Lund, IBM’s head of blockchain for financial services mentioned that “we are starting with markets that are outside of the US, but it won’t be long before we add US as an operating endpoint. It will be sometime this year’ we will get to it, third quarter, fourth quarter something like that. “
This is without a doubt very big news for the crypto space. Now to give you guys some perspective, the World Wire platform has payment locations in 72 countries, with 48 currencies and 46 banking endpoints where people are able to send or receive cash. While the six international banks are keen to issue their stablecoin, it could open up the possibility of banks using Lumens, the native cryptocurrency token from the Stellar network. I know we’ve mentioned news about Stellar already this week, but if banks did end up using Stellar, that would be a significant boost in adoption and definitely popularity of the token. But also, World Wire could even begin the support of other cryptocurrency tokens. They’ve decided to only support lumens for the moment because financial institutions are currently put off by the volatility of cryptocurrencies.
So where to next from here? Think of this as a start for IBM’s World Wire. Lund has a big grand vision, and the six international banks keen to issue stablecoins is just the beginning. “As more stablecoins come onboard, the whole notion of FX changes over time. We are working very hard to expand the ecosystem of stablecoins that will include many more banks and many more fiat currencies and even, eventually central bank issued digital currencies.”
This may be the kick off the news for World Wire, IBM, and Stellar, but it’s definitely not the first time we’ve reported news on banks and stablecoins. Remember the JPMCoin? I believe that in the next few years, we’re going to see an era where banks will most likely use their own, native stable coins when it comes to transactions and internal transfers. While Ripple is one solution for banks, looks like IBM is keen to aggressively implement their own inter bank solution using the Stellar blockchain, and according to CryptoBriefing, use Stellar Lumens, the XLM token to act as a bridge currency from one bank to another.
What do I think of this?
It’s definitely banks moving closer to cryptocurrencies. Does it fit in line with the original goal and intent of cryptocurrencies, to remove the intermediary? Not so much. Using cryptocurrency-based tokens will help banks and financial institutions be more efficient and cost-effective when it comes to transfers. As I’ve mentioned before, it’s probably the beginning of what may be the end of cryptocurrencies.
So what are your thoughts on the situation guys?
Are you happy that banks are taking advantage of cryptocurrency token for faster, cheaper transfers?
Or are you concerned that this move could hurt the cryptocurrency industry?
Let me know what you guys think in the comments below!
It’s Cindy with CryptoPig, Catch you guys around.
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Disclaimer: Cryptopig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.