After years in the making, it’s finally here.
We’re proud to announce that Stronghold is the Stellar network’s first official, venture-backed USD anchor.
Stronghold recently entered collaborations with IBM to explore uses for Stronghold USD within blockchain business networks on the IBM Blockchain platform.
Now institutional investors can exchange their U.S. dollars for Stellar lumens (XLM) and any other asset on the Stellar network through the Stronghold platform with Prime Trust as our custodian. Partnering with IBM will let us experiment with new ways for financial institutions and other organizations to use the Stellar network for faster, safer, and more efficient global transactions.
This has huge implications, not just for Stronghold or Stellar, but for the entire blockchain community.
Let’s go into what this all means.
Why Stellar Needed a USD anchor
The Stellar protocol hasn’t experienced the same level of adoption as Bitcoin or Ethereum.
Not because of the network itself, but because of a lack of access.
Early partnerships with exchanges like Coinbase have provided easy access to Bitcoin and Ethereum. Traders have been exchanging USD for BTC and ETH for years — the tradeoff being ever-rising transaction fees and extended wait times.
More recently, altcoins like Zcash and Litecoin have seen major growth by having platforms that exchange USD and other fiat currencies directly.
Up to this point, anyone wanting to invest in Stellar lumens (XLM) had to first buy BTC or ETH, then convert it into XLM. That meant multiple transactions, wallets, and wait times just to get access to the network. A lot to go through for the casual trader.
For Stellar to reach the next level, there needed to be a way for traders to buy XLM with fiat-based credit cards and bank accounts.
Anchors act as the bridge between existing currencies and the Stellar network. Now that our platform supports USD, anyone can trade Stellar lumens without having to first go through BTC or ETH. More people will be able to take advantage of Stellar’s powerful network.
USD on the Stellar Network
There are lots of reasons why we think Stellar is the best network to be involved with.
The Stellar protocol is best suited for simple cross-border transactions. It’s the best option for anyone wanting to send money quickly and efficiently.
Direct access to XLM means more people (not just traders & investors) will be able to take advantage of Stellar’s powerful network. This protocol comparison shows how Stellar stacks up against the other networks:
USD is still king. 64% of all central bank foreign exchange reserves are held in US dollars. 85% of all foreign exchange trading involves the US dollar. One-third of global GDP is from countries that have either adopted the US dollar or pegged their currency to it.
Most people want their stores of value and wealth to be as stable as possible. Making dollars digital would keep all of the utility of dollars while allowing flow at the speed of the internet.
Whether we’re talking about retail traders or institutional traders, one thing remains — people want their dollars.
We can’t understate how massive this is for Stellar! Having a direct USD to XLM link is further proof of concept on top of the praise and partnerships that have materialized over recent years and months.
Next Steps for Stronghold
Stronghold is ready to take the next step too. As a registered financial service provider who operates a trading platform and OTC brokerage, becoming Stellar’s first venture backed USD anchor is another big step.
We are opening enrollment to our private beta for institutions that want to settle payments or invest in cryptocurrencies.
Important Note: At this time, tokens are not available for retail customers but may be available in the coming months. If you are a retail customer, please sign up for a Stronghold account and submit your KYC to receive updates on these services if and when they become available.
If you are an institutional investor and are interested in applying to the beta program, click here to apply.
We’re proud to help bring Stellar to the world & connect the world. And we’re glad you’re along for the ride.
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