Binance Announces Bitcoin-Pegged Token

Binance, one of the world’s biggest cryptocurrency exchange has announced a bitcoin (BTC)-pegged token, BTCB on its native blockchain, Binance Chain in a blog post published yesterday, 17 June.

As per the blog post, the upcoming released BEP2 token will be tradeable upon the Binance Chain and also available on Binance’s decentralized exchange, the Binance DEX. In addition to this, the new asset is one of several planned cryptocurrency-pegged tokens which the exchange will launch on Binance Chain.

The blog post states that BTCB tokens are 100% backed by Bitcoin. The reserves are clearly visible as they are recorded on the public blockchain. Furthermore, Binance cites that using bitcoin as a backing asset for the new token allows for easier audits, as the wallets are available to anyone via the public blockchain explorer:

“The blockchain offers a much easier way to audit a crypto reserve than a traditional bank balance tether.”

On Binance, investors can trade the token against BTC, thus allowing users to exchange BTCB for the native coin which it is backed by.

Furthermore, the post also explains that by the creation of crypto-pegged tokens on Binance Chain will enable users of the Binance DEX to gain access to tokens which have native blockchains and are not otherwise available on the Binance Chain.

Binance also states that by having an increased number of tokens on the DEX will ultimately lead to better volume and liquidity. However, the company admits that this approach does diminish decentralization:

“While this approach is more centralized than atomic swaps, we believe it provides a higher degree of ease-of-use to most traders. And most traders are already trusting Binance.com to hold their funds anyway.”

In a recent tweet, posted earlier today, Changpeng Zhao, the CEO of Binance announced that the exchange was ready to move as much as 9,001 BTC. It an addition tweet posted a few hours later, Zhao confirmed that the transferred funds will be used to back the bitcoin-pegged token:

Back at the beginning of June, it was reported that Binance will block website access to users based in 29 countries, including the U.S.