The Strategist

Banks take interest in stablecoins


03/19/2019 - 13:59



Six banks from around the world signed a protocol of intent to issue their own stablecoins secured by national currencies in the Blockchain World Wire (BWW) payment network, Cheddar financial channel reports citing a statement from IBM Vice President Blockchain Initiatives Jesse Lund.



Patrick via flickr
Patrick via flickr
The top manager said that in the future the company could issue its own stablebcoin to work with banks. “Banks-oriented stablecoins of IBM will be an important development for solving problems and issues in the blockchain-based international payment system,” said Lund in an interview with Cheddar.

Lund also stressed that stablebcoins with value provided by national currency of any country are now under the scrutiny of world banking structures. It is believed that these digital assets have great prospects and a good future.

According to an IBM representative, market demand is forcing IBM to develop a solution for stablecoins designed for financial institutions. “Many banks around the world see huge benefits for businesses by issuing stablecoins in their national currency,” he said.

Immediately, six international banks announced their intention to issue their own stablecoins on the base of fiat currency using the IBM Wire blockchain system. The statement was made by representatives of IBM and Stellar during the Money 2020 Asia conference held in Singapore. Among those wishing to issue their own tokens are Brazilian Banco Bradesco, South Korean Bank Busan, and the Philippine Rizal Commercial Banking Corporation.

The rest of the issuers are still unknown. However, according to Lund, some of them are going to issue stablecoins based on the Indonesian rupee and the euro.

The Blockchain World Wire (BWW) platform developed by IBM and Stellar was launched last year. It allows banks to make cross-border payments in real time. To date, 44 financial institutions have joined BWW. Using the XLM token as a settlement tool for fiat currencies, BWW intends to eliminate traditional banking intermediaries that make the process of international transactions costlier and difficult.

Currently, the system supports more than 47 currencies for payments between 72 countries. “We allow the market to expand and choose between different networks. We are really glad that we are creating something new and revolutionary that can really change the scope of cross-border payments,”said Lund, describing his company's plans to increase the number of supported assets.

Lund had previously said that, if desired, the IBM XLM could be replaced with another digital currency, which would allow users to choose solutions that best meet their needs.

Currently, the largest stablecoin in terms of funds in circulation is USD Tether ($ 2 billion). Among the negative aspects of using USDT are the issuer's refusal to audit and verify availability of necessary reserves, as well as lack of transparency in the release of new tokens. Presence of a centralized issuer in the USDT protocol structure is a point of failure and creates significant risks for users.

source: cointelegraph.com




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