Binance has announced the implementation of cryptocurrency- pegged tokens on Binance Chain.
October 18, 2019, | AtoZ Markets – CEO and founder of Binance, Changpeng Zhao, proposed to list a Bitcoin Cash (BCH) pegged token on Binance DEX. CZ offers to list BCH-1FD, a pegged token that tracks the value of the native asset of Bitcoin Cash. BCH-1FD aims to provide a token pegged on the BCH value for trading on Binance DEX.
What is Bitcoin Cash Pegged Token?
Peg means to tie the value of one crypto to another or, as in the stablecoins case, matching the value of crypto to fiat. A typical example is Tether (USDT), which has been pegged within US dollars. In that case, 1 USDT will always be equal to US $ 1.
Before issuing such tokens, however, the company must deposit money in a reserve bank. People buy the token trusts that the issuer will always have enough money with the bank to support the number of coins in circulation. Now that’s what Binance is trying to do with its Bitcoin Cash Pegged Token. Bitcoin Cash pegged token means that the value of the token, in the case of Binance BCHB, will always be equal to the cost of 1 BCH.
Binance BCH Pegged Token
CZ noted that Binance would provide the transition between BCH and BCH-1FD through Deposit / Withdraw. As such, there is no possibility of development of this token or conflict of interest, Zhao concluded.
According to the proposal, users can exchange tokens for native BCH at Binance.com. Currently, the total circulating supply of BCH-1FD is 5,000 BCH but may increase in the future. BEP2 BCH will be mintable, and the total supply will increase as the market demands. All issued BEP2 BCH will be supported 1:1 by native BCH sitting with a publicly issued reserve address that can be monitored at any time.
In parallel to its BCH-1FD project, CZ has proposed to list two new trading pairs with Binance USD (BUSD) stable coin on the Dex: Bitcoin (BTC) / BUSD and XRP / BUSD.
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