IBM, the American multinational information technology giant announced on yesterday (18th March 2019) that it has signed letters of intent with 6 large banking institutions to launch their own stablecoins which will be backed by fiat currencies and issued on Stellar blockchain.
According to IBM, the partnership will allow these banks to operate international transfers faster and cheaper than the current banking system. Out of the six banks, three have been publically named which are RCBC based in the Philippines, Banco Bradesco based in Brazil and Bank Busan based in South Korea. The other banks shall be announced soon. The network was launched yesterday, however, the banking institutions are still waiting for regulations.
Currently, one stablecoins run on the IBM World Wire which is backed by the US dollar and launched by a San Francisco startup called Stronghold.
According to Jesse Lund, the head of blockchain for IBM, they are initiating with the markets that arre based outside of the United States, however, they plan to focus on adding the United States as an operational endpoint within the current year.
The IBM World Wire has payment locations in seventy-two nations with forty-eight currencies and forty-six banks and money transmitters.
The network shall also open up possibilities of the banking institutions using Stellar Lumens or XLM. XLM acts as a bridge between different fiat currencies in cases where the trading of different fiats becomes difficult.
Jesse Lund also added that the World Wire network could start supporting other cryptocurrencies in future, however, it currently supports just Stellar Lumes due to the volatility in the cryptocurrency market.