How Does Stronghold USD Work with IBM Blockchain World Wire?

May 9 · 2 min read

Our asset-backed U.S. dollar token offers institutional customers more robust regulatory technology.

Photo: Chris Duglosz (Flickr)

In March, Stronghold USD became the first U.S. dollar settlement vehicle on IBM Blockchain World Wire, a global payments network that’s used in more than 70 countries.

IBM World Wire dramatically simplifies how value is transferred: instead of using banks to transmit value between multiple nodes, a sender gives money to an institution that purchases Stronghold USD, or a different bridge asset.

A digital settlement provider like Stronghold then uses the Stellar network to transmit funds via a point-to-point transfer that includes settlement instructions. As soon as funds are sent, the sending and receiving institutions instantly convert digital assets into the recipient’s preferred fiat currency.

Stronghold USD creates new efficiencies when it comes to foreign exchange and cross-border payments, but there are a few differences between the Stronghold USD token that’s available to the general public and the tokens used for IBM World Wire, which are not publicly accessible due to regulatory and compliance reasons.

We created a separate USD token for World Wire so we could better serve institutional users with a more robust regulatory and compliance framework. For example, because we comply with the U.S. Treasury’s OFAC guidelines that prevent money laundering and trading in sanctioned regions, Stronghold USD is unavailable in several markets.

Additionally, regulated financial institutions that want to accept Stronghold USD must conduct compliance checks to see who has previously held a token. To streamline this process, Stronghold USD uses the auth_required attribute in Stellar’s API, which requires an anchor to approve anyone who wishes to hold their assets. Because tokens are tracked discretely and publicly, Stronghold USD is safer than cash.

In addition to Stronghold USD, IBM World Wire customers can use Stellar’s native currency, lumens (XLM), to move value, and IBM has signed agreements with six international banks that plan to issue stable coins on the network. Once those deals come to fruition, the network will include U.S. dollars, Philippine pesos, Brazilian real, Korean won, Indonesian rupiah, and the euro.

Stronghold’s regulatory technology removes many of the pain points associated with legacy banking; transactions that once took days to settle are now resolved within seconds, fees are fractional, and institutions can spend more time focusing on customers, and less on compliance and liquidity — which is probably why we’re hearing from so many companies who are curious about our offerings.

If your organization is interested in our products and services, email and a member of our team will get back to you shortly.


Stronghold | Digital Assets


67 claps

Written by

A financial service provider built on distributed ledger technology. Creator of Stronghold USD.


Stronghold | Digital Assets