London Block Exchange to Launch British Pound-Backed Stablecoin
London Block Exchange to Launch Cryptocurrency Pegged to British Pound
The London Block Exchange (LBX) recently announced plans to launch the LBXPeg, a new stablecoin backed by the British Pound. According to an article published by Business Insider on September 29, 2018, LBX gained permission from their banking partner to move forward with the crypto pound, which will be backed by a reserve of UK Sterling at a one-to-one ratio and held by a third-party bank.
The First Stablecoin Pegged to the Pound
Stablecoins are seen as the holy grail of the cryptocurrency industry as they are decentralized offer price stability, scalability, and can provide degrees of privacy and anonymity to its users by leveraging the advantages of cryptocurrencies while being pegged to an underlying asset.
While stablecoins sound great in theory, Tether, the most popular stablecoin, has generated significant controversy. Their lack of transparency and unclear audit system is causing the cryptocurrency community to grow weary and doubtful of similar products.
Benjamin Dives, the CEO of London Block Exchange spoke to Business Insider and mentioned that, unlike Tether, the LBXPeg’s UK Sterling reserves need to be regularly audited by a professional accounting company. Dives expressed great confidence in the LBXPeg stablecoin and explained that the token would be ready to be minted over the next ten days.
While there are over 50 different stablecoins, the LBXPeg will be the first coin pegged to the British Pound, giving it specific regional advantages over existing stablecoins. Dives added that “the primary use case will be 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 cryptopound.”
Stablecoins Soar in Popularity Around the World
Blockchain released a report that identified 57 different stablecoins since 2014 of which 39 percent are live in the cryptocurrency industry. While most coins range from being backed by traditional collateral, by cryptocurrencies, or organized based on an algorithm, asset-backed currencies tend to be more stable than algorithmic coins.
The study also demonstrated that over the past 12 to 18 months, a large number of stablecoin projects had started springing up. Circle, the cryptocurrency finance company, also announced the launch of a U.S. dollar-backed stablecoin on September 26, 2018.
Bit Trade also recently partnered with Emparta to launch an Australian-dollar stablecoin. According to the MIT Technology Review, the rush to create a stablecoin is a result of the volatility of cryptocurrencies posing a significant barrier and problem for the industry’s growth. A non-volatile cryptocurrency could thus catalyze the industry’s global user base and growth potential.