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IBM Launches New Payments System Powered by Stellar (XLM)

Stellar is looking to break into the world of blockchain technologies with financial applications, and it seems these last few days have been highly successful for the development team behind this interesting blockchain which already occupies a well-deserved sixth place in the Top 10 of the global market cap.


The last achievement in Stellar’s list comes with the strategic partnership with IBM to develop a Stellar-powered payment solution that aims to compete directly with the solutions designed by other initiatives such as Ripple’s xCurrent and xRapid.

In a document published by IBM, the famous technology company promotes “Blockchain World Wire” explaining that one of the advantages is that it offers a “new financial rail that can simultaneously clear and settle cross-border payments in near real-time”

“Sending money across borders today requires a series of intermediaries for both clearing and settlement, each adding time and cost to the process. With IBM Blockchain World Wire, clearing and settlement with finality happens in near real-time. The solution uses digital assets to settle transactions – serving as an agreed-upon store of value exchanged between parties – as well as integrating payment instruction messages. It all means funds can now be transferred at a fraction of the cost and time of traditional correspondent banking”.

Previously, IBM had announced its interest in using the Stellar Blockchain to create a stable coin that would be backed one-for-one with U.S Dollars. To this end they had signed an agreement with a startup called Stronghold to exploit the potential of blockchain technologies in a new mode of payment processing:

“What we really want to do is enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks,” said Jesse Lund, IBM’s head of blockchain services for financial institutions, in an interview for Coindesk

One of the most critical peculiarities is that neither IBM nor the Stellar Development Foundation had made any significant promotions. In fact, it could be said that beyond any advertising, they expect their product to speak for itself.

The Stellar community received this news with optimism. Stellar Lumens (XLM) is the best performing crypto in the top 10 of the global market cap during the last seven days.

There is still much information to be revealed. The product that could become the Stellar-powered main competitor of Ripple’s xRapid will be presented in a demo next month, according to Finextra.


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Insurance Ratings Bureau Pilots IBM Blockchain for Automatic Reporting

The American Association of Insurance Services (AAIS) is turning to the IBM Blockchain platform to support a new automated insurance reporting tool, the organization announced Wednesday.

Built on IBM Blockchain using Hyperledger Fabric, the open Insurance Data Link (openIDL) system is aimed to simplify regulatory reporting by allowing insurance carriers to store data on a permissioned blockchain for regulators to view on an as-needed basis, a press release says.

The system would essentially streamline the association’s current mission to consolidate and report its members’ insurance carrier rating data to various state-level Departments of Insurance.

IBM industry academy member Craig Bedell told CoinDesk in an email that AAIS specifically chose IBM Blockchain due to both the open-source nature of Hyperledger Fabric and the enterprise-level platform that the computing giant provides.

At present, AAIS submits either monthly or quarterly reports for each member insurer, depending on state laws. However, the new system, which is currently in a pilot phase, would allow AAIS to deprecate its data reporting role, as carriers would directly store their own data on the blockchain. Regulators would then be able to examine the information at any time, rather than waiting for a report to arrive.

AAIS chief executive Ed Kelly said in the press release that the organization recognizes “the potential for blockchain to streamline the regulatory reporting process for our member carriers, as well as the opportunity to improve security, accessibility and accuracy of data for regulators.”

“Hyperledger Fabric’s support for private and confidential transactions allows insurers to share data with the network, knowing that they own their data and have control over who has access to it,” said IBM Global Insurance Industry global manager Sandip Patel.

“This is an exciting example of how blockchain can bring together an entire ecosystem of users and allow information to be shared in new ways to drive real business results,” he said.

Although in the pilot phase, Bedell said that the platform is already “open for business.” Insurance carriers are already being onboarded and the organizations are working to bring on state Departments of Insurance as well.

IBM image via Shutterstock

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Citigroup and Barclays Join Experimental Blockchain Project

In recent years, financial institutions have begun to appreciate the perks that come with the blockchain technology. Its anonymity, speed, and security make it highly attractive to banks for use in their day-to-day transactions. Hence, the design of an in-trial platform for banks who wish to capitalize on blockchain technology.

About LedgerConnect

Multinational technology behemoth, IBM, and foreign exchange services firm, CLS, announced the creation of in-trial app store, LedgerConnect, on Monday. This platform is expected to launch in a few months’ time. With LedgerConnect, banks interested in programs based on the blockchain technology can use the platform trial pad.

These financial institutions will be selecting blockchain vendors, including Baton Systems, Copp Clark, Calypso, IBM, SynSwap, and OpenRisk. Theoretically, banks have it easier when they use LegerConncet to opt-in to blockchain projects. These banks can also use the same blockchain protocol, instead of using several incompatible ones.

In a statement made by Ram Komarraju, managing director of technology at CLS, he said:

What is the point of having these people building the same infrastructure? Instead of building several new blockchain applications for the same problem, banks can then focus their energies on their own firm’s operations.

The in-app trial platform is built on the IBM Blockchain Platform and Hyperledger Fabric Technology. It will apply blockchain technology to areas such as anti-money laundering “Know Your Customer” regulations and collateral loan management.

The platform, however, is yet to receive the go-ahead from central banks and the Federal Reserve Bank of New York. Because of its unregulated nature, banks cannot enjoy the potentials that come with using the platform. At the moment, an exact launch date is yet to be given. Vice president of financial markets of IBM, Keith Bear, gives early 2019 as a tentative date. He also hopes more banks would apply before then.

Citigroup and Barclays Sign up for the LedgerConnect Blockchain

Wall Street banks have in recent times, recognized the potentials of the blockchain technology. To solve a litany of problems and improve security, these financial institutions have tested different blockchain technology platforms.

The blockchain technology, which is the underlying technology cryptocurrencies such as Bitcoin, is a secure way to send sensitive information. Its anonymous nature and speed make it very attractive for banks, which deal in personal data and security.

Nine prestigious banks, including Citigroup and Barclays, have decided to key into the LedgerConncet. Citigroup and Barclays have in the past, partnered with different startups to help build projects that address various issues. These issues range from instant transactions to compliance with onerous financial regulations.

Integrating Legacy Systems with Emerging Technologies

The moves made by these banks is commendable, but there is the problem of the old merging with the new.

Vice president of financial markets of IBM, Keith Bear, commented on the old versus new trend. He said:

The challenge is being able to work together across organizations of different speeds. On one side we have a large highly regulated industry. On the other side we have much more agile and fast-footed fintechs with limited resources. Our role is in some respects of mediating those differences in speed and resources.


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Technology Giant IBM To Utilize The FDIC-Insured Stronghold Stablecoin

Reuters reported that IBM, one of the largest technology companies in the world, has just announced that it will be backing a new cryptocurrency stablecoin that will be pegged to the value of one U.S. dollar.

What Are Stablecoins?

For those who are unaware, a stablecoin is a cryptocurrency that is pegged to the value of an asset that is relatively stable, so something like the U.S. dollar or one ounce of gold. Stablecoins provide all the benefits of blockchain technology, namely transparency and nearly no risk of counterfeit assets.

Stablecoins provide consumers with a way to secure the value of their assets in an often volatile cryptocurrency market. When you trade something like Bitcoin or Litecoin for Tether, you are essentially shorting the cryptocurrency market. By converting your traditional cryptocurrencies into Tether or another market equivalent, you remove the risk of portfolio value fluctuation.

Additionally, this new sub-asset class of cryptocurrencies can be used for worldwide/cross-border payments, as stablecoins retain their value through worldwide outlets.

Stronghold Secures Partnership With IBM 

On Tuesday, IBM confirmed a partnership with the U.S-based Stronghold financial services platform, that will see the IBM use the new cryptocurrency in its systems. The stablecoin, fittingly named Stronghold USD, was launched on the Stellar blockchain on Tuesday after some time in development.

To obtain the Stronghold stablecoin, prospective buyers will have to deposit U.S. dollars with the company’s partner bank, which is the Nevada-based Prime Trust bank. Once depositing the funds, users will be able to receive the equivalent dollar value of their deposit in Stronghold USD.

According to the financial service provider, the recently-issued tokens are currently designed to be used by businesses, like financial institutions, multinational corporations, and asset managers. However, Stronghold will allow retail consumers to acquire this stablecoin within the upcoming months.

Speaking on the use of the new cryptocurrency, Tammy Camp, Stronghold’s founder, and CEO noted:

The token allows folks to do payments, foreign exchange between companies in a very seamless and frictionless and more secure way. It enables people to be able to trade that token with other assets and other tokens as well.

Jesse Lund, IBM’s vice president of the firm’s growing blockchain division, acknowledged the partnership, stating:

The engineering work has been done on this token and we have seen a little bit of the early release of it. IBM will explore use cases with business networks that we have developed, as a user of the token. We see this as a way of bringing financial settlement into the transactional business network that we have been building.

IBM has recently begun developing a cross-border payment system using the Stellar Lumens (XLM) cryptocurrency. IBM’s current utilization of XLM has proven to be rather costly, as payments require fiat to be converted into XLM and then back into another fiat currency, subjecting the payment to the often volatile nature of Stellar Lumens. But with the integration of the Stronghold USD token, it is expected that the payment system will begin to offer lower fees, while also increasing payment efficiency.

What Makes Stronghold Different Then Tether?

  • Stellar Blockchain

Unlike a majority of other stablecoin projects, like Tether, DAI/MKR, and TrueUSD, Stronghold is based on the Stellar blockchain, which allows for a high transaction throughput and very minimal fees, which are often fractions of a cent. To compare, the Ethereum network, which TrueUSD is situated upon, can process a maximum of 15 transactions per second, while the XLM blockchain can process hundreds of transactions per second.

  • FDIC Insured 

The new U.S-pegged stablecoin will be ensured by the Federal Deposit Insurance Company (FDIC), which means that any deposits made into Stronghold’s partner bank will be insured against loss or theft.

  • Aimed At Institutional Clients 

Unlike the Tether cryptocurrency, which is aimed at retail investors, Stronghold has a focus on institutional clients, looking to integrate a stablecoin into financial services.


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IBM, Global Citizen Seek Blockchain Solutions for Humanitarian Aid

IBM and Global Citizen are issuing a challenge to the world’s developers: use blockchain to revolutionize how donations are made to humanitarian causes.

The tech giant and the anti-poverty campaign movement are partnering on “Challenge Accepted,” inspired by the United Nations’ Envision 2030 initiative, which aims to improve the lives of impoverished and at-risk people.

Developers taking part in Challenge Accepted will use IBM’s Blockchain Platform Starter Plan to build a network that encompasses all aspects of the donation process.

There’s a gamification aspect as well – along the way, developers who perform certain actions can earn “points” that they can then redeem for access to IBM experts, for example.

Stepping back, the UN and other assistance groups have previously explored using blockchain to track aid to impoverished areas. Cryptocurrencies, too, have served as a platform for facilitating donations to a range of causes, from clean water access to the provision of electricity for a school in South Africa.

And in what is perhaps the most notable trial of its kind to date, the World Food Programme (WFP), the food assistance arm of the United Nations, tapped the ethereum blockchain to authenticate and record disbursement transactions.

More than money

Simon Moss, a co-founder of Global Citizen, argued in a blog post published Friday that the technology has the potential to change the face of humanitarian aid.

And it’s not just the money that would be better accounted for, he said – organizations can use a blockchain to improve transparency in the flow of goods being delivered as well.

“Blockchain can provide clarity on not only who is donating, but how money and supplies flow through organizations that provide aid – such as tracking a gallon of water purchased by an organization to the location where it was delivered,” he wrote.

Kathryn Harrison, who leads product management for the IBM Blockchain platform, told CoinDesk that the initiative grew out of internal conversations earlier this year about the “opportunities to use this technology in areas that we can do some pretty substantial social good.”

“I think it’s a really exciting opportunity to help engaged citizens see how they can build something that’s going to drive accountability and improvement in the [non-governmental organization] sector,” Harrison said.

A link in the chain

Harrison also framed the challenge – which runs from May 15 to July 14 – as part of the wider work being done at IBM on the blockchain front.

“We’re focused on so many different types of use cases. We look at food safety, we look at microfinance, we look things like the environment and carbon credits and energy savings,” she explained. “And this just seems like another opportunity to empower developers to put their skills to use for good.”

At the end of the challenge, five winners will be chosen from the pool of contestants. Harrison said some of the projects may be listed in the IBM Blockchain Platform, opening up those templates to other users – and winners could potentially take their projects further through IBM’s Garage workspaces. The winners will also receive tickets to Global Citizen’s Global Citizen Music Festival in September.

The challenge is an opportunity for developers looking at aid-focused uses of blockchain to advance their ideas – but as Moss contended in his blog post, there’s a bit more at stake here.

He concluded:

“This is a bold reinvention of how philanthropy and donors interact.”

Humanitarian aid image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Renewable-Energy Blockchain Project Moves Past Test Phase

Renewable energy may be clean, but it’s not always available when needed, so a major power transmitter has kicked off a project using blockchain technology to manage the flow of power.

Tennet announced last week that it was running the first European blockchain-controlled power stabilization scheme, in a partnership with battery supplier Sonnen, using IBM’s blockchain software.

The two partners announced test pilots in May, as CoinDesk reported at the time. That work has now entered the phase of practical application.

Urban Keussen, Tennet’s board chairman, said the project allowed the company to lead the way on the integration of renewable energy into the power supply of Europe.

He said in a statement:

“As a grid operator, we are taking a new approach here to better integrate decentralized renewable energy sources and secure supply. At the same time we offer citizens the opportunity to actively participate in the energy transition.”

Blockchain technology makes it easier to securely and efficiently manage flow as new sources of power get added to the grid, Tennet said.

Sonnen provides batteries to homeowners that allow them to store power generated at their homes when they aren’t there and using it. These batteries are networked, in the SonnenCommunity. By connecting that network to Tennet’s transmission system, the power distributor can tap stored power nearby as needed or offload excess power into the batteries.

“Instead of firing up power plants in the south of Germany we just draw the required electricity from our storage systems,” Sonnen Managing Director Philipp Schröder said in a statement.

A spokesperson for Sonnen explained in an email to CoinDesk that this isn’t simply energy trading. Rather, it’s making home equipment a part of the real infrastructure of the grid, not just an endpoint.

Currently, European transmission operators manage congestion on the network using expensive techniques like varying output at the power plant level, contracting with third-party plants for extra electricity and curtailing wind power output. Such approaches cost the system roughly 800 million euros across Germany in 2016, according to Tennet.

Tennet transmits power to 41 million users in the Netherlands and Germany.

Power lines photo from Shutterstock.

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