By
Temitope Olatunji
April 19th, 2024
Major cryptocurrency exchange Binance is testing a British pound stablecoin on its native blockchain, Binance Chain. According to the CEO of Binance, Changpeng Zhao, the stable coin is still in a testing phase, but their intentions are serious.
It seems that Binance decided to issue a new British pound-pegged stablecoin under the name BGBP on the firm’s native Binance Chain blockchain.
Its CEO Changpeng Zhao tweeted:
https://twitter.com/cz_binance/status/1135486986788040705?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1135486986788040705&ref_url=https%3A%2F%2Fwww.coinrivet.com%2Fbinance-is-testing-out-a-new-gbp-based-stablecoin%2F
When asked about a possible euro-based stablecoin on Twitter, CZ responded that it would be a little trickier as the “euro has a negative interest rate”.
Big cryptocurrencies fan called “CryptosBatman” noted that it is unbelievable that Binance moves that fast. He also said that he expects company’s main token BNB “to skyrocket”. However, at the time of writing, it was sliding 7.22 % downwards to $29.80.
Talking about stablecoins, Tether is still a dominating one with more than 78% of the nearly $4 billion worth of stable-pegged tokens in circulation today.
Bare in mind that the coins backed by fiat currencies are the most popular stable cryptocurrencies. The US Dollar is the most common fiat currency used as a collateral.
In this method, every token is backed on a 1:1 basis against real USD deposited in a bank account. If a stablecoin holder wants to liquidate his position, the coins will be destroyed and the deposited USD will be paid out.
The only other UK pound-pegged stablecoin is the TrueGBP project, which also looks to be in the testing phase with just over £1 million issued in ERC-20 tokens on Ethereum. However, it doesn’t seem to be much successful at this time, although there are over 1 million of these tokens in circulation already.
At the time of this writing, Binance supports several stable coins, including TUSD, USDC, USDS, USDT, and PAX.
Overall Supply Is Limited
As one would come to expect from a new stablecoin, its overall supply will be limited during the early stages. This mysterious GBP-based stablecoin is no different, as Changpeng Zhao confirmed only 200 BP has been generated so far.
It is pretty much obvious that these are “test coins” and not actual currency backed up by British Pound balances. That situation may come to change in the near future, depending on how the project progresses in the months ahead.
At the beginning of this year, Binance launched a new exchange called Binance Jersey particularly for the British and European markets and supporting both of the euro and the pound.
It is obvious that this major exchange is aiming to expand its stablecoin infrastructure and it leaves us to see how the exchange will approach all the technical challenges of launching such tokens. Also, it will be interesting to see how it will be holding a stable peg in an emerging regulatory environment for value-pegged crypto assets across the world.
Stably Launching USDS.B on Binance Chain
There is however another stablecoin on Binance. Yesterday a venture-capital backed startup Stably, announced that it will be launching its StableUSD (USDS) token on the Binance protocol. Called USDS.B, it will the first stablecoin to launch on Binance Chain allowing other projects under the network to establish transparent and liquid on-chain trading pairs.
Mahraan Quadir, an analyst for Stably said they chose Binance because building on Binance Chain provides many benefits for stablecoin users, such as improved security, ease of use, and speed of transaction. He said:
“USDS.B is backed by 1:1 with a USD reserve, just like our USDS ERC-20 token is.”
This makes USDS.B one of the fastest major stablecoins on the market, with one-second block confirmation time and the ability to process several thousands of transactions per second.