LBX opened in November 2017; it offered an OTC crypto trading service and a mobile app that allowed UK-based customers to buy and sell BTC, ETH, LTC, XRP, and a variety of other cryptocurrencies.
Here is what you need to know about LBXPeg:
- Tied to the value of the British Pound (GBP);
- Fully backed by GBP reserves (held in an auditable UK bank);
- Implemented as an ERC-621 token on the Ethereum blockchain (ERC-621 is an extension of the ERC-20 standard that allows increasing or decreasing the token supply; this was needed in order to have the "required flexibility in the total supply to match the quantity of GBP held in the segregated bank account");
- Will also be issued on other blockchains (providing that "compliance controls can be maintained"); and
- May have variants in future that are pegged to the dollar or the euro;
LBX's press release says that LBX developed LBXPeg in response to growing demand in the crypto market for stablecoins. It accuses many of the existing stablecoins of having "opaque management structures, distribution schedules and auditing processes." It also says that LBXPeg will allow easy and quick transfer of cryptopounds, which will make it suitable for a wide range of use cases.
LBX's CEO, Benjamin Dives, said in an interview with Business Insider that the GBP reserves "will also be regularly audited by a top accountancy firm" and that the first cryptopound will be "minted in the next 10 days." Here is how he described what he sees as the main use cases for LBXPeg:
"The primary use case will be settlement for OTC trades in the London market, then commonwealth exchanges where they don't have fiat banking, and then securities tokens who want to pay dividends in a cryptopound."
LBX's announcement comes at a time of increasing interest in stablecoins. In the past few weeks, as covered by CryptoGlobe, at least three new major fiat-backed stablecoins have launched: the Gemini exchange's "Gemini Dollar"(GUSD), Paxos' Pax Standard (PAX), and Circle's "USD Coin" (USDC)
Featured Image Courtesy of London Block Exchange