Binance Drops BGBP Stablecoin; Citing Challenges in the Issuance and Redemption Process
Binance crypto exchange announced that it would discontinue its GBP-backed stablecoin ‘BGBP’ as of Nov 17 at 12:00 PM UTC. This coin was tied on a 1:1 ratio against the British pound and launched by Binance back in June 2019.
According to the announcement on Nov 16, the BGBP stablecoin is among a list of trading pairs that will either be removed or cease trading on the Binance exchange. The announcement noted that BGBP’s last trading pair against BUSD marks its final use case within the exchange’s trading ecosystem.
Notably, users who will still hold their BGBP after trading stops will have an option to leverage Binance’s convert function to exchange their stablecoins to GBP on a 1:1 basis. The blog post by Binance reads,
“Please note that BGBP/USDC is the last trading pair for BGBP. For users still holding BGBP after trading ceases, they will be able to use the Convert function to convert their BGBP to GBP at a 1:1 ratio.”
A Binance rep who spoke to theBlock, revealed that the BGBP was the exchange’s first fiat-pegged stablecoin experiment, hence more like a proof-of-concept. According to the spokesperson’s comments, BGBP posed some challenges in issuance and redemption,
“It worked, but the issuance/redemption process was not the most friendly for users.”
The spokesperson further highlighted that Binance would instead direct users to its alternative GBP on-ramping services to derive similar utility.
“As such, to offer our users with better services, we have discontinued BGBP and will direct users to our other available fiat on-ramps that offer GBP.”
While Binance issued BGBP, its dollar-backed BUSD stablecoin has thrived more despite being a Paxos stablecoin white-label. According to coinmarketcap metrics, the BUSD stablecoin supply is cool $662 million compared to a mere $700,000 by the BGBP counterpart.
It is noteworthy that the BGBP stablecoin was primarily bought through Binance Jersey, a subsidiary that the exchange is shutting down this month. This also coincides with upcoming U.K stablecoin regulations that seek to implement oversight on these digital assets to be at par with rival payment methods.