Binance Stablecoin Could Rival Tether’s Dominance In The Cryptocurrency Market
- Binance is planning to launch a stablecoin in the near future
- The main question is whether it will have a negative effect on Tether’s dominance
The Chief Financial Officer at Binance, Wei Zhou, confirmed that they are going to be releasing a new stablecoin in the next months. The main goal seems to compete against Tether(USDT), the largest stablecoin in the market. Binance is one of the largest and most popular crypto exchanges around the world.
Could Biance’s Stablecoin Affect Tether’s Dominance?
In a recent conversation with CCN, Mr. Zhou commented that their business decisions are made thinking about the users of the platform. The goal for issuing a GBP stablecoin is to provide users with a wide range of options and choices to trade digital assets.
The first stablecoin is going to be the BGBP, or Binance Great British pound. The stablecoin is going to be issued through Binance Chain, which was released a few months ago. During an interview with Bloomberg, Zhou said that they are working on launching this stablecoins in just “a matter of weeks to a month or two.”
Tether is the largest and most popular stablecoin around the world. The digital currency was able to reach the top 4 in the crypto market and it provides a hedge against volatility to users in some exchanges. At the same time, the stablecoin is one of the most traded in the world, even more than Bitcoin.
According to a recent report released by Diar, the transaction volume of Tether reached an all-time high for 2019. In addition to it, the report shows that most of this volume is coming from China rather than from Western countries.
It is very important for stablecoins to have liquidity. Tether is very good at providing liquidity to users in exchanges such as Binance, where users do not have fiat trading pairs. Although there have been other stablecoins released to the market, not all of them were able to attract as many users as Tether does. Some of these stablecoins include USD Coin (USDC), Paxos Standard (PAX) and Gemini USD (GUSD).
Although Binance is going to be releasing its own stablecoins, the intention is not to steal a part of the market from Tether. Indeed, they will be working with other stablecoins such as the euro and the yen. Zhou explained that there are just a small number of users that trade using USD. Many other individuals prefer to use other fiat currencies.
The new digital currency that Binance will issue is going to be backed 1:1 with fiat currency that will be used to earn some interest. The exchange wants to provide transparency to users. Currently, Tether has a market capitalization of $3.23 billion.