LBX To Unveil Stablecoin Backed By The Pound
With the stablecoin surge, questions have been asked about their sustainability in the future.
Inside LBX Stablecoin
The London Block Exchange has revealed that it will be launching a stablecoin backed by the pound. The virtual currency will be dubbed LBXPeg. LBX boss Benjamin Dives while addressing a media outlet stated the currency will be live in less than ten days.
According to Dives, the stablecoin roll out received a green light from a bank which has not yet been made public. The bank’s responsibility will be to hold the reserve for LBXPeg. Dives added that the bank’s reserves will be audited regularly.
The exchange claims that it is the only UK crypto firm that has ventured into safe banking. The platform provides OTC service in addition to educational materials under the College of Crypto initiative.
Dives pointed out that LBXPeg usage will be centralized around the London market followed by exchanges within commonwealth countries. The usage will also be channelled to security tokens that wish to pay dividends.
More details about the currency were published on LBX website where it emerged that the ethereum blockchain will be deployed for establishment and supply of the virtual currency.
Upon its launch, LBKPeg will be in form of an ERC-621 token. The firm noted that the stablecoin will also be accessed through other different blockchains within the confines of the law. Additionally, the stablecoin is also exploring ways it can enrol the dollar and the Euro with LBKPeg as a means of establishing stability.
LBX pointed out that the stablecoin is key due to mistrust with ongoing projects. Stablecoins are gaining traction since they fill the gap left by projects linked to fraud. The firm further notes that we need to have more stablecoins for business entities and stakeholders.
Queries About Stablecoin Surge
Many market players have labelled the current rise in stablecoins as the stablecoin rush. Studies reveal that stablecoins joining the market have been on the rise especially the last 18 months. Many people are opting for stablecoins since they don't come with capital gain charges.
US-based Circle is the recent firm to offer a stablecoin. It launched the USDC pegged on the dollar at ratio 1:1. The stablecoin was approved by New York regulators days after Gemini and Paxos launched their own.
Some quarters have, however, questioned the sustainability of stablecoins. Most specifically, queries have been raised around tether and its validity. Additionally, some say that the value of stablecoins might plummet in case investors bow out in masses.