A UK-based cryptocurrency exchange has launched a new stablecoin pegged to the pound sterling (GBP), the latest in a series of similar cryptocurrencies to pair one-to-one with fiat currencies.
Launched by London Block Exchange, the stablecoin will officially be known as LBXPeg. The currency will be tied to the value of the pound and backed by funds in an auditable UK bank account on a one-to-one basis.
Dubbed the ‘cryptopound,’ the exchange envisages the currency being used as a utility token, including amongst institutional investors, for facilitating fiat-equivalent peer-to-peer transactions over the blockchain, or for tokenized settlement of OTC trades.
In an interview with Business Insider ahead of the launch, LBX CEO Benjamin Dives explained a number of potential use cases: “We will be ready for the first cryptopound to be minted in the next 10 days. 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.”
— LBX (@LBXSocial) September 30, 2018
LBX launched back in November 2017, and has since gone on to become one of the busiest cryptocurrency exchanges in the UK. In backing the stablecoin concept with the GBP-pegged cryptopound, LBX is signalling its support for the technology and its use cases.
Pioneered by the USD-backed tether (USDT), the stablecoin concept has emerged as a highly functional application of cryptocurrency, secondary to the payments use case demonstrated by bitcoin BCH.
However, USDT has come in for some criticism, notably around a lack of transparency and accountability—criticisms LBX has said it had in mind when creating its fully transparency auditing processes and management structures.
Following the release of the cryptopound, the firm has indicated its intention to explore similar stablecoins for U.S. dollar and Euro.
The announcement from LBX follows after Goldman Sachs-backed Circle announced its USD Coin, a USD-backed stablecoin which aims to improve on the flaws identified in USDT. It comes at a time of increasing interest in stablecoins, and how they can be used in international settlement, dividend distribution, and a number of other specific use cases.
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