How Many Is Too Many? UK Crypto Startup To Issue Stablecoin
London-Based Crypto Firm To Launch LBXPeg Stablecoin
On Saturday, it was revealed that a lesser-known, yet well-established cryptocurrency startup has begun to eye the establishment of its own stablecoin, or in other words, a cryptocurrency that is tied to the value of an asset that exists outside of this nascent market. For those who aren’t in the loop, London Block Exchange, which goes by LBX for short, is a United Kingdom-based cryptocurrency infrastructure provider that intends to open this industry up to consumers on a massive scale.
So far, LBX allows users to buy, sell, and store crypto assets through its easy-to-use, minimalistic mobile app or through its over-the-counter service, which has garnered some traction in spite of its youth. But now, after seeing success with its relatively bare-bones cryptocurrency exchange, it has become apparent that the London-based startup intends to expand its operations and to propel itself to new heights.
Speaking with Business Insider on the topic, Benjamin Dives, the CEO of LBX, noted that this new cryptocurrency, dubbed LBXPeg, will be tied to the value of British pound at a 1-to-1 ratio, meaning that one pound will equate to one LBXPeg token. The stablecoin has reportedly already been approved by a banking partner, who will be holding the UK sterling required to issue LBXPeg, but details regarding the institution were not elaborated upon.
According to an official blog post found on the startup’s web page, LBXPeg will be built upon the ERC-621 protocol, which is apparently a step up from the traditional ERC-20 standard. The firm explained that Ethereum was evidently a great choice due to its transparency, efficiency, and the fact that it’s “close to reaping the benefits of its upcoming scaling solutions.”
Along with transparency on the blockchain side, Dives also added that the pound reserves will be regularly audited by a “top accountancy firm” to ensure that every LBXPeg is accounted for. If LBX doesn’t see any rash regulatory crackdowns, it was made clear that the first cryptocurrency would be minted at some point over the next 10 days.
Elaborating on its exact aspirations, the aforementioned release alluded that it intends to disrupt the already-established stablecoins, adding that many of the firms behind these projects are not-transparent. LBX wrote:
LBXPeg is required in the market as although the appetite for stablecoins is growing, trust in current projects remains flat. Through opaque management structures, distribution schedules and auditing processes, many available stablecoin offerings are inadequate for the needs of businesses, traders and consumers.
It is also important to note that LBX is still seeking to launch its own crypto-focused card system, which will allow members who are a part of the platform’s ecosystem to spend their hard-earned crypto in the real world, in a sense. LBX has also taken a leading role in the local cryptocurrency community, alongside its drive for innovation, recently hosting a $6,000 giveaway for the London-based fans of the Nano (NANO) crypto asset.
While many see this as a bullish sign, some fear that this subset of cryptocurrencies is starting to become over-populating, despite the fact that competition usually betters a market or industry. Travis Kling, a former portfolio manager turned the manager of Ikigai, explained that the dozens of stablecoins that currently exist are “over-capitalizing attractive areas of investment so much that they have become bad investments.”