Changpeng “CZ” Zhao, CEO of major cryptocurrency exchange Binance, has announced that the company is now also planning to launch its own stablecoin, similar to recent plans from Facebook. In a blog post announcing the plans, Binance reveals the project will be entitled Venus and will be “an initiative to develop localized stablecoins and digital assets pegged to fiat currencies across the globe.”
Following the announcement, CZ posted a further message on Twitter assuring the community that Binance does not intend to compete with Facebook. In the post, he says he believes the new project “should help Libra if you think about it.”
Facebook created something of a media storm when it announced its plans early this year, and has since faced an endless slew of criticism and scrutiny from regulators and financial institutions the world over. Many believe the company wields too much power over its millions of users, and with the recent Cambridge Analytica scandal still fresh in many minds, is not responsible enough to manage a global currency. Lawmakers will continue their deliberations regarding the plans at a meeting with the Swiss Federal Data Protection and Information Commissioner in Switzerland this week.
A necessary stablecoin
It would appear that the aim of the new stablecoin from Binance is to increase adoption of cryptocurrencies by creating an easily accessible on-ramp for governments and organizations to get involved with crypto. In that sense, it is significantly different from Facebook’s Libra coin which is aimed at creating a singular global currency managed by a range of major finance and technology companies.
With volatility often cited as a major drawback to cryptocurrency adoption, the need for a secure stablecoin backed by a trusted organization is a much-desired product at the moment. Since its launch a few months ago, independent developers have already created several stablecoins on the new Binance Chain, including Bitcoin-backed BTCB and GBP-back BGBP. While unconfirmed, it is assumed that the new Venus stablecoin will also run on Binance Chain.
Following an impressive rally in June, the cryptocurrency market has been going through a tough time lately. Bitcoin (BTC) fell sharply after hitting resistance at $13,800 and has consistently failed to break back above $11,000 since. Meanwhile, Bitcoin dominance is at a 12-month high, accounting for almost 70 percent of the overall cryptocurrency market.