Over the past few months, there have been quite a few stable coin launches in the United States as investors are demanding it. A similar demand wave seems to be starting across the Atlantic in the UK, as a UK based start-up has now announced that it would be developing a stable and tokenized version of the British Pound.
LBXPeg: A new cryptocurrency pegged to the British Pound
A UK startup has announced plans to launch a new cryptocurrency pegged to the British pound. The London Block Exchange, which does over-the-counter crypto trades and is building a crypto exchange and card, announced that it has received permission from an unnamed banking partner to launch a new cryptocurrency, which is currently being dubbed as the LBXPeg, backed by reserves of UK sterling.
The one-for-one reserves equivalent coin will be held in an account at the third party bank assuring coin holders an assured backing of the British Pound. LBX’s CEO, Benjamin Dives, was also quoted saying that the reserves will also be regularly audited by a top accountancy firm. He also added that he believes the LBXPeg will be the first so-called “stablecoin” to be pegged to the pound.
To quote Benjamin as covered by some media:
“We would be ready for the first crypto pound to be minted in the next 10 days,” Dives told Business Insider.
“The primary use case will be a 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 crypto pound.”
Stablecoins still a favorite among investors, traders, and exchanges
Stablecoins shot to popularity last year thanks to the rise of Tether, a cryptocurrency pegged to the dollar. As these cryptocurrencies prices are pegged to real-world assets, usually the dollar, they play an important role in providing price stability of a mainstream currency but still retain their interoperability and digital nature. Hence they are in great demand among investors, traders, and exchanges as they provide temporary protection in mitigating the volatility of cryptocurrencies.
But slowly these seem to be becoming a bridge between the traditional and digital financial worlds as new investors find comfort in holding them and gain understanding first before jumping into crypto investing. With stable coins, popularity continuous to grow among the trader community, these new investors who want a slice of cryptocurrency are also adding to its rising demand.
The demand for these stablecoins is so huge that according to a report released by crypto wallet provider Blockchain said there are now over 50 stablecoin projects under development. The report states that 23 stablecoins (40%) are live and 34 stablecoins (60%) are at the pre-launch phase.
Adoption of stable coins
The report also states that the adoption of stable coins has been superlative as
“The total market value of all stablecoins is $3 billion, or 1.5% of the total market value of all crypto assets; Tether comprises 93% of the all stablecoin market value”
Tether (USDT) is the second most actively traded cryptocurrency (~60% of BTC daily trading volume) and earlier this year it also entered the top-10 crypto asset rankings by market value.
As far as listing on exchanges are concerned the report states,
“Stablecoins are listed on over 50 different exchanges at present, with Tether featuring the greatest number of total individual exchange listings (at least 46) “
“Stablecoins have had success gaining listings on major exchanges, with eight stablecoins (42% of live coins) featuring one or more Tier-1 exchange listings: Tether (6), TrueUSD (5), SteemDollar (4), NuBits (2), BitBay (2), Gemini (2), Paxos (2), Numins (1), STASIS (1), HelloGold (1)”
With stablecoins booming in the US, a new entrant from the UK would make the competition healthier. Having stablecoins in various currencies will help in getting more people into cryptos as they would have a stable home currency token to bet on in crypto markets.
Will we some stable coins from Asia as well? Do let us know your views on the same.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.