There’s really nothing Binance won’t get into.
Now the Chinese-turned-Maltese exchange is launching a dollar-backed stablecoin, in direct competition with Tether, the godfather of stablecoins, and others like Coinbase/Circle’s USDC.
Other stablecoins have emerged, such as Paxos Standard. However, of the most recent batch of stablecoins, USDC has done the best, likely due to its outward association with Coinbase.
BUSD – The USDT Competitor To Watch?
Coinbase has one of the largest user bases for a regulated crypto exchange, with well over 10 million US customers. This is a significant number, given that many still view cryptocurrency as a new and untested frontier.
For people investing in cryptocurrency, stablecoins offer an obvious and convenient way to keep money on the blockchain, but also secure profits.
In the ideal case, with stablecoins like USDC and TUSD anyway, each token is backed by a dollar held in reserves, and can be redeemed. However, the common use case for a stablecoin is to trade into it when prices get high, and then use it to buy back into various cryptos when prices drop.
This tactic can be used with traditional bank accounts and fiat accounts, but the money is not as portable, or exposed to the crypto market.
Direct exposure to the crypto market, without the risk of volatility, is perhaps a stablecoin’s primary offering.
Binance offering a USD stablecoin will be embraced as a step in the right direction. Asian market makers and blockchains have increasingly come into the fold. For example, Tron recently became the third blockchain to carry the Tether stablecoin.
Stablecoins Can Be A Trader’s Best Friend
Binance and others have a good opportunity in launching new stablecoins, as trust in Tether has waned as a result of various scandals. The outcome of one such scandal: the news that perhaps the “stablecoin” is not 100% backed at present.
Needless to say, this is not the kind of thing that holders want to hear.
Nevertheless, the crypto stays in circulation, with the largest distribution of all stablecoins.
BUSD will initially be available via Binance in a few trading pairs. The stablecoin could easily be integrated by other exchanges, if they decide to support the Binance blockchain.
Binance has grown astronomically since its launch in 2017, displacing many elder exchanges and becoming the top crypto exchange. It also lists a massive number of pairs by comparison.
