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Binance launching Bitcoin-pegged token on Binance Chain, other coins to follow

Binance launching Bitcoin-pegged token on Binance Chain, other coins to follow

Binance announced the launch of native Binance Chain BEP2 tokens pegged to top cryptocurrencies “in the coming days,” starting with Bitcoin.

The debut token, Bitcoin-pegged ‘BTCB,’ will list on Binance.com within “a day or so” tradable against BTC, and will also be proposed for listing on Binance DEX, the exchange said Tuesday in a blog post.

The announcement sheds light on a tweet issued Monday by the exchange’s CEO Changpeng Zhao, who forewarned 9,001 BTC was to be transferred out of a Binance hot wallet “for a good thing.”

Binance disclosed BTCB’s reserve addresses on both the Binance Chain and Bitcoin blockchains, reflecting the new token’s 9,001 BTC backing ($83 million). This will make BTCB the 84th-largest cryptocurrency by market capitalization upon launch.

Tethered on Blockchain

Binance stated the reserve addresses will be listed for all pegged BEP2 tokens “for anyone to audit” on the blockchain, and that a trade system will ensure “100% backing” at all times. The post explains:

“If this buy order is filled, a new order will be placed while an equal amount of funds will be deposited from the reserve address into Binance.com. The sum of the buy order and the funds on the published reserve address will be bigger than the total supply of the pegged token, ensuring there is always 100% backing.

According to Binance, such an arrangement provides a level of systemic transparency that a fiat-pegged token cannot.

Tether, the company behind the first and largest USD-backed cryptocurrency by market capitalization, has for years grappled with allegations of insolvency over auditing issues—and in February ultimately revealed only 74 percent of its USDT tokens were backed with dollars.

To Binance, which ranks consistently in the top 5 by adjusted volume globally, the pegged tokens will bolster the trading volume, liquidity, and utility of its recently-launched decentralized exchange, which currently ranks 72nd by daily volume.

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