London Block Exchange (LBX), a U.K.-based blockchain and cryptocurrency startup, has announced that it is developing a new so-called “stablecoin” that will be pegged to the British pound.
Dubbed LBXPeg, the new coin will be backed “one-for-one” by the U.K. sterling, the company announced Sep 29, 2018.
According to the Business Insider, LBX has already obtained the requisite approval from an unnamed banking partner. The report further adds that the U.K. sterlings reserves will be deposited in a third-party bank.
Saying that LBXPeg is the first-ever stablecoin pegged to the pound, Benjamin Dives, Chief Executive at LBX, promised that the company will have its reserves regularity audited by a reputed accountancy firm.
LBX currently operates as an over-the-counter crypto trading platform. The company plans on launching its own crypto exchange and wallet services in the foreseeable future.
“We would be ready for the first crypto pound to be minted in the next 10 days,” Dives said, adding: “The primary use case will be the 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 crypto pound.”
LBX has stated that the new coin will be an ERC-621 token based on the ERC-20 standard. According to the company, the ERC-20 compliance “will grant [LBXPeg] the required flexibility in the total supply to match the quantity of GBP held in the segregated bank account. LBXPeg will also be issued on other blockchains where compliance controls can be maintained.”
It further added that following LBXPeg’s release, the company will try to tie the coin’s value to all accounts holding other fiats such as the U.S. Dollar or Euro in order to enhance its stability and scope.
LBX’s move to launch a stablecoin with a unique flavor has come amidst rising activities and interest in the asset class.
A stablecoin is a cryptocurrency whose price is pegged to real-world assets such as a fiat currency (usually the U.S. dollar). Like the moniker itself suggests, stablecoins are by design more stable than other cryptocurrencies while still retaining their digital nature and interoperability.
Because of their virtual immunity from the extreme volatility prevalent in the crypto space, stablecoins are increasingly gaining traction among traders all over the world, prompting innovators to come up with new products, each promising to take things up a notch.
For example, earlier in September, a Goldman Sachs-backed cryptocurrency company became the first issuer of a new stablecoin it helped create. Dubbed the US Dollar Coin (USDC), this new coin enables users to “tokenize” the U.S. dollar using an online gateway. Similarly, Gemini, a cryptocurrency exchange owned by the Winklevoss twins recently launched a self-titled stablecoin. According to some estimates, at least 50 stablecoin projects are currently underway, which is a telltale sign of the rapidly increasing popularity of the asset class.