Binance’s New Stablecoin Poses Serious Threat to Tether’s Dominance

By CCN: According to Wei Zhou, the chief financial officer at Binance, the most widely utilized crypto asset trading platform in the global market, the exchange is planning to issue a stablecoin in the upcoming months, possibly to compete against Tether.

Tether dwars other stablecoin in bitcoin volume on Binance (source: binance.com)

Speaking to Bloomberg in an interview, Zhou reportedly said that the exchange plans to launch its stablecoin “in a matter of weeks to a month or two.”

Can binance compete against tether?

Although there were some periods wherein the dominance of Tether demonstrated signs of slight decline in December 2018 and in April 2019, ultimately, due to strong demand from users in Asia, Tether has been able to secure its dominance over the global stablecoin market.

According to a report released by Diar, Tether’s on-chain transaction volume, meaning the volume of the stablecoin on blockchain networks like TRON and soon EOS, achieved a new all-time high for 2019.

“On-chain data shows Tether movements hitting a new all-time-high for 2Q19 with one month left on the calendar for the period. What is most striking, however, is the volume coming in and out of Chinese exchanges dwarfs western and global trading venues and accounts for more than half of the total transaction value of known parties,” the research firm wrote.

China accounts for 60 percent of Tether volume

China accounts for 60 percent of Tether volume (source: diar.co)

The majority of Tether’s transaction volume in the second quarter of 2019 was driven by China, which currently has a major user base of the stablecoin.

Considering the network effect Binance has over the global crypto exchange market and its international user base, a native stablecoin issued by Binance could demonstrate a strong merit to users.

For stablecoins, liquidity is crucial. Despite the compelling features of other stablecoins like the Gemini Dollar and USDC, issued by strictly regulated exchanges Gemini and Circle in compliance with U.S….

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