Cryptocurrency market hits the roof as IBM announces its experimenting with stablecoin

IBM has entered a partnership deal with a fintech startup Stronghold to get involved with cryptocurrency, pegged to the US Dollar. The tech giant is interested in a so-called stablecoin, tied to an existing government-backed currency to mitigate volatility/

According to the official press-release, the cryptocurrency is called “Stronghold USD” and backed by the U.S. dollars. The reserves will be held by Prime Trust, an asset manager, focused on blockchain and digital technologies.

IBM is going to experiment with virtual currency to explore the technology and see how it can be used to help banks and other financial institutions. 

While the stablecoin is supposed to be volatility-proof, there is a certain amount of controversy about another stablecoin tether. The authorities suspect that it was used to manipulate the bitcoin price during the last year rally.

But it follows much controversy surrounding a well-known stablecoin known as tether, which has been accused of being used to prop-up the price of bitcoin during last year’s spike in value.

Market overview

The cryptocurrency market added over $20B to its value in a single day and reached  $294 billion, according to CoinMarketCap. Bitcoin skyrocketed above $7,000 to trade at 7,351 by the time of writing, which is 9% gains on a daily basis. Ethereum, the second largest coin also cleared an important hurdle of $500. ETH/USD is changing hands at $504. Ripple has been moving in sync with the market. The coin has gained 6.5% and touched $0.5100 handle.

BTC/USD, 4-hour chart