Computing giant IBM, which has carried out several initiatives in blockchain technology, is collaborating with 6 banks to allow them to issue their own stablecoins, while also letting them make use of Stellar Lumen’s XLM token.
The 6 international banks have signed letters of intent and will use IBM’s World Wire, a cross-border payments solution, to offer near instantaneous transactions to their respective customers. IBM’s World Wire runs on the Stellar blockchain, a project co-founded by ex-Ripple co-founder Jed McCaleb.
The banks can also use XLM, Stellar’s native token, as a “bridge currency” when faced with difficulties in trading in fiat.
3 of the 6 banks in the collaboration have been named: Filipino RCBC, Brazilian Banco Bradesco and South Korean Bank Busan.
Although the banks are waiting for approval from their respective authorities, one San Francisco-based startup, Stronghold, has released a dollar-backed stablecoin on World Wire, a development that was announced earlier.
IBM’s Head of Blockchain, Jesse Lund, spoke to CoinDesk about the significance of stablecoins:
As more stablecoins come on board, 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 – so digital representations of fiat currencies – and even, eventually, central bank issued digital currencies.
IBM says that it is the network operator, and that Stellar itself is at the protocol level.
For Lund, blockchain in the private, permissioned space has an important part to play in the future of financial services:
We are doing a lot of other stuff in the private permissioned space, which is code for enterprise blockchain. But this is a different type of system and a different type of network, and IBM is convening this. I mean, this is something IBM has never done before.
Banks are now mulling over the idea of whether they should release their own stablecoins.
JPMorgan Chase, whose CEO Jamie Dimon had at one point been anti-crypto, released its own stablecoin called JPM Coin which has been derided by the crypto community and even Ripple officials.
Citibank was also rumored to be considering its own cryptocurrency, though not so much as a proof-of-concept was released. It appears those plans are now completely off the table.
