Binance Just Made Things Even More Interesting!
Industry-leading crypto exchange Binance announced its “Project Venus,” a blockchain project with the primary focus of developing stablecoins and fiat-pegged digital assets on the Binance blockchain.
The popular exchange has seen unrivaled growth in the last 18 months, and some of its achievements include outperforming German mega banks in early 2018, launching its own cryptocurrency (BNB), and successfully launching its own decentralized exchange running on the Binance blockchain.
The announcement explains that Binance has issued multiple stablecoins already. With its Binance Chain launching months prior, this move will only expand the Binance brand, reach, and influence in not just the cryptocurrency markets, but also the financial sector long-term.
“Binance Chain has been running securely and robustly and has issued a range of stablecoins, including a BTC-pegged stablecoin (BTCB) and the Binance BGBP Stable Coin (BGBP) pegged to the British Pound.
Binance welcomes additional government partners, companies and organizations with a strong interest and influence on a global scale to collaborate with us to build a new open alliance and sustainable community.” – Binance’s Venus Stablecoin Announcement
If maintained properly, a stablecoin should be pegged to the currency it represents at a 1:1 ratio. If this ratio is abused, the pegged digital asset can move erratically against the currency it represents.
The stablecoin market is one of controversy and rivalry. USDtether and its connections with Bitfinex have caused doubt within the crypto community, and JPMorgan’s private stablecoin emerging amongst countless others has shifted the market’s dominance by USDt elsewhere.
Does “Venus” Pose a Threat to Facebook’s Libra Coin?
Amongst the basket of stablecoins, Facebook launched its own digital asset (Libra). Backed by fiat-based reserves, it isn’t officially described as a stablecoin in its whitepaper, but it still derives its price from fiat currency. Here at Crush The Street, we monitored the rise of Libra Coin and the implications it could have on other fiat-pegged digital assets and the traditional financial system itself.
What Binance’s Venus Project is doing serves to be a key contender to Facebook and further dilutes the power base that USDt once enjoyed.
Through the Venus Project, Binance isn’t focusing on one specialized stablecoin, but creating an environment where they can emerge and flourish. Hopefully pegged digital assets that emerge into the markets are fully backed by the currency they represent and we don’t see a repeat of fractional reserve banking in the cryptocurrency sector.
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.