Binance, arguably the world’s biggest exchange by trading volume, has launched an initiative to develop local stablecoins, or digital coins backed by local fiat currencies. The stablecoins will be designed in consultation with central banks and governments and will be available on a blockchain project called Venus. The Malta-based company is seeking partnerships with global corporations, tech firms, and governments for the project.
Yi He, Binance co-founder, stated that the company believes that stablecoins will eventually replace fiat currencies globally and bring a new and balanced standard of the digital economy. “We hope to achieve a vision, that is, to reshape the world financial system, allow countries to have more tangible financial services and infrastructures, protect their financial security and increase the economic efficiency of countries,” she told online publication Coindesk.
Technical Support and Co-Existence With Libra
Binance plans to offer technical support and a risk-compliance control system to the project. To make this project a reality, Binance is going to offer technical and a risk-compliance control system.
Parallels are already being drawn between Binance’s initiative and Facebook’s Libra project. The concept for both projects is similar in that they are organizing partnerships with local and international players for stablecoins that can be used for economic transactions. Unlike Facebook, which has chosen to collect a smattering of private corporate behemoths for its consortium, Binance has cast a wider net and is willing to work with governments from the beginning.
For what it is worth, Binance has already expressed support for the Libra coin. Changpeng Zhao, CEO of the exchange, tweeted on Monday, August 19 that Venus was not trying to dominate Libra. Instead, it was pursuing co-existence. The CEO added that Venus could even help Libra. This cryptic tweet could indicate that the Venus project is going to launch in places where Libra fails to gain regulatory approval. This could include China, which has been quite tough on crypto. It is quite unlikely that China will allow Libra to launch there.
Binance has already launched other stablecoins. In June 2019, it launched a stablecoin backed by Bitcoin. It has also launched another stablecoin backed by the British Pound and a native token, called BNB, for transactions on its exchange.