World’s largest exchange-Binance and its CEO Changpeng Zhao announced that the platform will launch its own stablecoin. He posted the altcoin news on Twitter and we read more about it in the text below.
Zhao noted that his exchange is testing the possibilities for the stablecoin product. It is known that when stablecoins are used in actual trading, the demand might shift in both directions creating a spread. The spread can be up to 10 percent high depending on the problems with the stablecoin.
The Binance Coin (BNB) started as an ethereum asset issued during the crowdfunding even of the exchange. Until the launch of the Binance Chain, the altcoin was used as a means to pay fees on the exchange. Since then, Binance saw a massive increase in value and is currently standing over $30 per unit. The token can now be used just like any other token on the native chains. For example, the address issued the BGBP had more than 1000 BNB but spent them to issue the asset.
Some Twitter users are wondering why the world’s largest exchange chose the Pound Sterling over the US dollar. Binance has established its business in countries dominated by the USD but it does have the Binance Jersey that opens the doors for the UK banking system. Zhao didn’t comment on the reason for a GBP stablecoin but the users guessed that it has something to do with legal issues.
As reported in the latest cryptocurrency news, Zhao mentioned that he is only working on the stablecoin product without any further information. The BGBP will start a whole new field of choices for the stablecoins on the market.
The explicit backing of the exchange might have a potential advantage over other stablecoins. This means that when users buy the BGBP on Binance, the units will be instantly issued. When traders try to sell the units, they can be instantly destroyed. This could bring for a much more transparent supply for at least one stabelcoin.
Also, Binance is not the only large exchange that is eyeing stablecoins. For example, Huobi launched HUSD in the previous months which is more of an exchange than an actual token but you can’t withdraw it or use it elsewhere.
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