International Business Machines Corp is backing a new cryptocurrency pegged to the US dollar, in a partnership with US-based financial services provider Stronghold that adds stability to a sector known for its volatility, the companies said.
The so-called stable coin, Stronghold USD, launched on Tuesday on the Stellar blockchain platform. Buyers of the coin will deposit greenbacks with the company's partner bank, Nevada-based Prime Trust for Stronghold to issue the tokens based on a 1-to-1 ratio.
Stable coins, pegged to an asset like gold, or major currencies such the euro, pound and US dollar, have emerged as issuers seek to expand uses for digital currencies, which are unregulated and volatile. Bitcoin, the most well-known token, has fallen around 55 percent so far in 2018 against the dollar, after surging more than 1,300 percent last year. IBM also announced on Tuesday a partnership with Columbia University to open the Columbia-IBM Center for Blockchain and Transparency. It will offer students access to IBM internships and joint research.