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Binance, the world’s biggest cryptocurrency exchange, recently confirmed what many had suspected: Binance is gearing up to launch its first stablecoin pegged to the British pound, BGBP. According to Bloomberg, this is the first of many
According to Binance’s chief financial officer, Wei Zhou, the exchange will begin offering stablecoins “in a matter of weeks to a month or two,” which may present some competition to the undisputed king of stablecoins, Tether.
Co-founder of Texas-based crypto hedge fund Capital management, Kyle Samani said: "A stablecoin issued by Binance would certainly threaten Tether’s value proposition."
Zhou explained that Binance is planning on issuing a host of new stablecoins for most of the world’s currencies, like the euro and the yen. However, there are no plans to launch a US dollar-backed stablecoin.
"From the users’ perspective, only certain portions of the world use the dollar," Zhou said. "Other users use other currencies, and we feel it should be reflected in stablecoins as well."
Tether made the headlines recently after it became known that the stablecoin is only 74% backed by cash and securities. Binance intends to have BGBP 100% backed and offer more transparency, which may encourage some Tether users to make the switch Zhou told Bloomberg.
However, according to Paolo Ardoino, CTO of Bitfinex, which shares its leadership with Tether, they aren't worried about any implications BGBP may have on tether's dominance. "As the crypto market matures, competition is welcomed to speed up the transition of stablecoins into a wider market," he said in an email.