Dive Brief:
- Cryptocurrency exchange Binance announced plans Monday to launch Venus, an open blockchain project in a Chinese-language statement on the exchange's website. Venus will operate as a "regional version of Libra," referring to Facebook's proposed digital currency.
- The exchange seeks to partner with governments, corporations and tech companies to develop localized stablecoins pegged to fiat currencies. Binance has already launched one stablecoin pegged to bitcoin, and another tied to the British pound. It also listed a U.S. dollar-backed cryptocurrency in November.
- Binance CEO Changpeng Zhou tweeted Monday his exchange is not seeking to dominate Libra with this move. "Always happy to co-exist," he wrote. "In fact, this should help Libra, if you think about it. Will leave it at that."
Pushing adoption, yes. Domination, no. Always happy to co-exist.
— CZ Binance (@cz_binance) August 19, 2019
In fact, this should help Libra, if you think about it. Will leave it at that. https://t.co/HLSywLb2mi
Dive Insight:
Stablecoins have gained traction among traders as a means to park money when markets are volatile. A Binance executive said Monday she sees stablecoins as a tool to balance the economy.
"We believe that in the near and long term, stablecoins will progressively replace traditional fiat currencies in countries around the world, and bring a new and balanced standard of the digital economy," Binance's co-founder, Yi He, told The Block. "We hope to achieve a vision … to reshape the world financial system, allow countries to have more tangible financial services and infrastructures, protect their financial security and increase the economic efficiency of countries."
Zhao's tweet hints Venus could focus on countries such as India and China, where local restrictions will keep Libra out. Binance has not said whether it has any established partners on the Venus project. Facebook, however, announced the Libra initiative this year with 27 backers.
The social media giant has faced scrutiny from lawmakers ever since it proposed Libra. The blowback has forced the company to remain flexible with its initial plan for a 2020 rollout. "Uncertain and evolving" laws regarding cryptocurrencies may "delay or impede" Libra’s development, Facebook said in its most recent quarterly filing to the Securities and Exchange Commission. "There can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all," the company said in the risk disclosure section of the document.
Facebook is hardly the only company to propose its own digital currency. Walmart filed a patent application this month for one of its own.
Like many in the digital space, Binance has faced security challenges. Hackers withdrew 7,000 bitcoins (about $40 million) from the exchange in May in a “large scale security breach."
However, the exchange said it was time to take its next step in crypto. "Instead of resisting change and losing the opportunity, it is better to embrace change," Binance said Monday.
