On Thursday (June 5), Wei Zhou, the Chief Financial Officer (CFO) of Binance, is reported to have said that his company is preparing to issue its own fully fiat-collateralized stablecoins “in a matter of weeks to a month or two.”
Twitter User Discovers Evidence of a Binance-Issued Stablecoin
The first hint of a Binance stablecoin appeared on June 3 when Twitter user “CryptosBatman” came across a new token called BGBP (“Binance GBP Stable Coin”) while using Binance Chain Explorer, which led him to send out the following tweet to announce this discovery:
BIG NEWS!
It looks like @Binance has issued their Stable Coin $BGBP on Binance Chain!
It's incredible how fast Binance moves. I can't say enough how big this is for Binance and Binance Chain.
Expect $BNB to skyrocket from here! pic.twitter.com/FAEdvMG2tF
— CryptosBatman ⚡ (@CryptosBatman) June 3, 2019
This is the page that you will see if you search for “BGBP” in Binance Chain Explorer:
And then if you click on the transaction shown, you should see this page:
Then, on the same day, Changpeng Zhao (aka “CZ”), Binance’s Co-Founder and Chief Executive Officer (CEO), commented that this new stablecoin was still being tested and that only GBP 200 had been minted:
This is in testing phase still, only £200 minted so far. Slowly, but surely…
— CZ Binance (@cz_binance) June 3, 2019
The next day (June 4), Binance’s official Twitter account confirmed that the company’s CFO had also commented about this new stablecoin while speaking as part of a panel at the Money20/20 Europe 2019 conference:
” $BGBP which we are currently testing and will launch in the future is an effort to diversify the stablecoin assets offered in the ecosystem. In line with #Binance's mission, we would like to provide users with more freedom of choice.” – @weizhouBinance pic.twitter.com/sRauKGZidt
— Binance (@binance) June 4, 2019
Yesterday (June 5), Bloomberg reported that via a phone interview it had been told by the Binance CFO that Binance would be issuing its own fully fiat-backed stablecoins on Binance Chain “in a matter of weeks to a month or two.”
Kyle Samani, co-founder of crypto-focused investment firm Multicoin Capital Management, told Bloomberg via email that this means that this move by Binance would bring Tether some serious competition:
“A stablecoin issued by Binance would certainly threaten Tether’s value proposition… Binance could also work with an auditor to offer strong assurances that the tokens are fully backed and easily redeemable… Considering the recent events with Tether, those assurances would be a compelling reason to use Binance’s stablecoin.”
The first fiat-backed stablecoin to be issued by Binance, according to Zhou, is Binance GBP (“BGBP”), and the bank where the GBP reserves will be held will be revealed when the stablecoin is launched. Zhou also said that Binance planned to issue in the future stablecoins corresponding to other currencies (with the exception of the U.S. dollar, presumably to avoid dealing with U.S. regulators and to face less competition):
“From the users’ perspective, only certain portions of the world use the dollar. Other users use other currencies, and we feel it should be reflected in stablecoins as well.”
Jeff Dorman, the Chief Investment Officer (CIO) at Arca, told Bloomberg that these Binance-issued stablecoins should help drive up the value of Binance Coin (BNB):
“This would positively impact BNB simply because it would likely lead to more volumes and ultimately more revenue for Binance, and in theory this would steal market share from USDT. But Tether has proven to be quite resilient in the face of competition, and I’m not sure stealing market share is the goal — growing the pie is the goal.”
This news has already helped the BNB price. According to CryptoCompare, at press time, BNB is trading at $31.44, up 5.47% in the past 24-hour period:
Featured Image Courtesy of Binance
