IBM Blockchain Revolution! Impact of Crypto Asset Stellar on the Market
The most favorable company for blockchain technology in the world. Maybe that’s IBM! During March 2019, IBM announced that it would issue a new stable coin. The IBM-led interbank network has also expanded and now it has grown to a scale that includes 44 banks around the world.
It’s easy to overlook thanks to the huge signboard called IBM, but there are some crypto assets that are secretly expected in this news. That is Stellar, which we will introduce in this article.
IBM’s stable coin will be issued from the Stellar network, which may have the potential to move the value of Stellar in the future. Let’s learn about its blockchain, such as the characteristics and strengths of Stellar again.
- IBM issues Stable Coins from six world banks using the Stellar net
- The attraction of the crypto asset Stellar
IBM issues Stable Coins from six world banks using the Stellar net
“IBM issues new stable coin”
Such news is booming in the crypto asset market. The other day, Facebook announced the issuance of its own currency and stable coin issuances centered on large IT companies is becoming the main focus of the current market for crypto assets. Specifically, it has not been decided when IBM will issue its own currency, but six international banks located in Brazil, Korea, and the Philippines have already announced their participation in this project. In addition, IBM is developing an international remittance service, which is similar to the third largest market capitalization (as of March 23, 2019).
(Reference: CryptoTimes, 3/19/2019, It has become apparent that 6 international banks plan to issue a stable coin on the blockchain provided by IBM.)
This project is called “IBM Blockchain World Wire” and has a total of 44 financial institutions from around the world. But, IBM’s project will use a crypto asset called Stellar. This stable coin issuance will also be developed from this Stellar platform.
When this happens, the demand for Stellar is likely to increase in order to use IBM’s new international services. Stellar has already grown into a cryptocurrency that is popular with many investors, but it can still be said that it currently keeps a low profile. Depending on the future of IBM, the value of Stellar may increase significantly, so let’s learn about the appeal of Stellar now.
The attraction of the crypto asset Stellar
As of March 23, 2019, the cryptographic asset Stellar has a market capitalization of over 230.0 billion Yen and ranks eighth. At the same time, Ripple, the third largest in the market capitalization, showed weak growth, despite its number of successful investors. Ripple and Stellar have many things in common and investors often compare the two. Let’s take a closer look at the differences between Stellar and Ripple including Stellar’s unique features.
Similar to Ripple, which is third place in total market capitalization
Ripple is developing an international payment service using its crypto asset. They have already formed partnerships with more than 100 banks worldwide to form the Ripple Network.
When a user asks a partner bank for an international payment, Japanese Yen is exchanged for Ripple currency (XRP), which can become the US Dollar or Euro, and is delivered to the other party immediately. Compared to traditional international payment services which often take more than a week to send money, the Ripple Network makes a huge difference.
Besides Ripple, Stellar is one that also provides such international payment services. In Stellar’s case, by asking a partner bank for a payment, it mediates the Stellar currency (XLM) during the process and money is instantly transferred to the other party’s account.
Providing an international payment service for individuals
Stellar and Ripple also offer international remittance services, so it’s hard to tell what the difference is. Actually, the difference between Stellar and Ripple is in the targeted customer segment. Ripple plans to expand its own developed network mainly for corporate customers. Stellar, on the other hand, specializes in the same network but also for individuals.
Speaking of personal payment services for individuals, the overseas labor market in the Philippines is a typical example. Filipinos go to the United States to seek higher salaries because English is their second language. They often send money they earn abroad to their families back to the Philippines. The market size reached 2.8 trillion Yen in 2017, and has now grown to about 10% of GDP in the Philippines. Thus, Stellar and Ripple seem to target similar markets at first glance, and in fact they can co-exist due to different market focus.
Impact on the market from the issued crypto assets of the Stellar Network
While Ripple has partnered with the SBI group to announce partnerships with various financial institutions around the world, Stellar is partnering with IT giant IBM to build a solid international network. If IBM’s own currency came from Stellar’s network, you could consider using the Stellar currency (XLM) to get that stable currency. As such, the demand for Stellar would increase and it may expand beyond the current trading volume.
In addition, as a stable coin with a stable value, it would be distributed within the same network providing enhancement and convenience for its international payment service and the IBM coin could have a more focused area than Ripple. However, it can be expected that the two types of currencies, Stellar and the IBM coin, will be side by side in one service causing confusion for the user. For Stellar, who gained power from giant IBM, the hope is that each other’s claims follow a parallel line and they share a similar dream.
Until now, Ripple and Stellar tended to be compared with many investors. Ripple has already joined hands with over 100 companies and is actively exploring business development with SBI Group. Compared to Ripple, partnerships with Stellar do not form easily and it looks like they are searching in the dark. The news about issuing a stable coin partnership with IBM is a delightful announcement for Stellar fans. Ripple and Stellar should be able to co-exist based on their business models, but it is still more interesting for investors to ask which will be more successful.
Either way, Stellar and Ripple should very much enjoy looking forward to future growth.