In a move that has surprised many, Binance’s Chanpeng Zhao (CZ) has confirmed rumours that he’s launched a new stablecoin pegged to the GBP, called BGBP and that it’s currently being tested on Binance exchange. So far as of June 3, only £200 has been minted, and the exchange plans to slowly issue it publicly.
Whilst this isn’t the first GBP tagged stablecoin (see TrustToken’s TrueGBP and the CryptoPound from London Block Exchange), it’s likely to appeal to exchange users who will use it to take the profit of a trade safely, without having to wait to exchange for fiat.
Why would Binance issue a stablecoin – will it help Binance users?
The idea behind stablecoins is so traders don’t need to offload from position, back into fiat, which might take five days to a week, then come back in to crypto again to make the next trade. Going from crypto to fiat, fiat to crypto can take a long time, and the trader might well have missed the trade they wanted to do or the move that they wanted to make. Traders offload that risk onto the stablecoin, and so they can bounce back into the market.
Stablecoins keep the many benefits afforded to digital assets, without the loss of a trusted, stable, fiat currency or other reliable assets in which to emulate their value. Within the constantly changing landscape of blockchain technology, as it moves into new industries and provides better solutions for existing legacy platforms, Stablecoins become a new option that could help bring digital assets, as a whole, one step closer into to the mainstream.