Binance to Introduce Its Own Pound-pegged Stable Coin Soon
“This will leave a positive impact on the BNB, which will inevitably bring more trading volume and eventually bring more revenue to the Binance. In theory, it would also steal market share from USDT. But in the face of competition, and until now Tether has proved that it has considerable flexibility.”
Traders use these lower-volatility coins to facilitate transactions and to park funds during wild swings in prices Wei Zhou, CFO of Binance, the cryptocurrency exchange giant, said in an interview that Binance would issue stable coin in the next few weeks or few months. Before that, Zhao Changpeng, the CEO of Binance have confirmed on Twitter that a stablecoin pegged to pound was being tested. He hopes the issuance of new stable coin can provide more freedom of choices for users.
As Zhou said, the first stable coin issued by Binance is called GBP, which will be denominated in pound and 100% backed by pound. He said that once the stable coin under test are officially launched, Binance would disclose the bank which has adopt it. Zhou also indicated that it would gain interest from legal currency deposits as Tether does.
In addition, Zhou said that Binance would introduce more stable coins pegged to other currencies, but they have not planned to introduce stable coins supported by the US dollar. The goal of Binance is to provide stable coins for more currencies in the world, such as the euro and the yen.
Binance will also work with other companies to issue its own stable coins on Binance Chain. Before that, startup Stably announced that it will issue dollar-pegged stable coins on Binance Chain. In response, Zhou said that:
“From the users’ point of view, only some parts of the world use dollars. Other users use other currencies, which we think should accord with stable coins, .”
Cryptocurrency traders usually take advantage of stable coins with low volatility to deposit capital when prices in the cryptocurrency market fluctuate sharply. At present, Tether (USDT) is a well-deserved market leader, accounting for 98.7% of the stable coin trading volume. But Kyle Samani, founder of Multicoin Capital, an encrypted hedge fund, said that, “The stable coin issued by Binance is bound to be a threat to USDT. Binance can also work with the Audit Institute to provide a strong guarantee that the stable coin can be fully supported and easily converted.
Hearing this news, many users thought Binance should pay more attention to updating, while some users thought more freedom choice of money would be provided.
According to information previously published in Tether’s lawsuits, only 74% of USDT is supported by cash and cash equivalents. Zhou said that the stable coin will be 100% supported by cash and equivalents and will provide greater transparency. This may attract more traders.
Jeff Dorman, chief investment officer of Arca, said in an e-mail that “this will have a positive impact on the BNB, which will lead to more trading volume and eventually more revenue for the Binance. In theory, it would also steal market share from USDT. But in the face of competition, Tether has proved that it has considerable flexibility. Maybe stealing market share is the goal — growing the pie is the goal. For now, Tether isn’t worried.