Is a Binance Stablecoin On the Horizon? CEO Teases Investors Should Be “Careful What You Wish For”
Binance is the leading cryptocurrency exchange in the entire world, so their decisions come with a lot of weight in the community. With simply delisting the Bitcoin SV token as a result of comments made by Craig Wright, multiple investors and exchanges boycotted the token as well. Considering the success of the company so far, one Twitter user suggested that the company launch their own stablecoin as well.
When Changpeng Zhao, the CEO of the exchange, saw the post, he teased with comments of his own – “Careful what you wish for.”
Careful what you wish for.
— CZ Binance (@cz_binance) May 1, 2019
So far, there has been no jump in price from the Binance coin as a result of the statements, though the comments were only made a few hours ago.
Stablecoins were introduced into the market as a way to reduce volatility in the crypto market, giving investors a 1:1 ratio with the pegged fiat currently. There are some stablecoins that have been backed with math, while others are collateralized with cryptocurrency (like the Dai stablecoin), but the fact remains that these types of crypto assets are growing quickly.
There are some cryptocurrency exchanges that have already begun work on creating fiat-backed stablecoins of their own. The largest crypto exchange in the US, Coinbase, recently collaborated with Circle in October 2018 for the launch of the USD Coin (USDC), which is linked directly with the US dollar. In New York, the Gemini Exchange launched their Gemini dollar stablecoin the month prior.
Zhao’s comments were likely a result of the reports of Tether’s lack of backing by the US dollar. On Thursday, a civil suit was filed by a New York attorney that accused Bitfinex of a cover-up scheme and tying in affiliate Tether with the claims. The legal filing was 23 pages long, explaining that Bitfinex misappropriated funds, and then used Tether’s cash reserves to cover the $850 loss.
Tether issued a statement in response, saying that they have not participated in any wrongdoing, and that the filing from the New York lawyers was “written in bad faith and are riddled with false assertions.” Tether’s lawyers released a subsequent statement that USDT is only 74% backed with fiat currency, as opposed to their former claims of 100% coverage.
The allegations against Tether come at an inconvenient time for Tron as well, considering that CEO Justine Sun just announced their own stablecoin on Tron’s blockchain. Due to the legal issues, Sun posted to Twitter that they decided to “postpone” the new rewards program “until there’s more clarity” on the case surrounding Bitfinex and Tether.
I’ve decided to postpone our #USDT rewards program for future updates until there’s more clarity regarding @bitfinex and @Tether_to. Regardless, I firmly believe stablecoins will continue to play a big role in the blockchain space. $TRX #TRX #BTT $BTT https://t.co/xpe1eA2URK
— Justin Sun (@justinsuntron) May 1, 2019