Binance will issue a number of tokens pegged to leading cryptocurrencies on Binance Chain to boost the number of trading options on its platform.
The tokens are also likely to be extended to Binance DEX, the firm's recently launched decentralized exchange, as they create the potential to in effect move cryptos from different blockchains onto its network.
The company said in a blog post that it expects to release the first such token – one pegged to bitcoin and to be listed as BTCB – in the coming days. A trading pair will be created on Binance.com between the pegged token and bitcoin (BTCB/BTC).
The crypto-pegged tokens, based on the exchange's BEP2 format, will be backed by Binance's reserves of the pegged cryptocurrency. Before the news was announced Monday, CEO Changpeng "CZ" Zhao tweeted a warning of an impending move of bitcoin for the purpose.
There will be a transfer of 9001 BTC soon, no need to FUD. It's for a good thing, details to follow. Waiting for whale_alert.
— CZ Binance (@cz_binance) June 17, 2019
Binance explained in the post:
The Binance team reasoned that the increase in the selection of tokens available on Binance DEX will increase trading volume and liquidity, thereby furthering the utility and value of the platform.
Also noteworthy is that Binance is eschewing the option to use to cross-chain atomic swaps or other decentralized approaches to enable exchanges of non-native tokens on the DEX.
The company said:
In the post, the firm said that the new tokens are "proposed" for launch on Binance DEX currently.
Additionally, because the reserve addresses will be published on the blockchain, Binance said the new crypto-pegged tokens will be easier to audit than traditional bank reserves.
The company is encouraging clients to issue pegged tokens of their own coins on the Binance Chain, offering (though not guaranteeing) to facilitate a pegged/native pair.
Earlier this month, Binance also confirmed to Bloomberg that it would soon launch stablecoins on its chain too.
Chief financial officer, Wei Zhou, said the first stablecoin offering, to be linked to the British pound, will be live on the platform “in a matter of weeks to a month or two.”
Changpeng Zhao image courtesy of Binance
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