Is Binance the world’s biggest Bitcoin exchange?

Binance, the world’s biggest crypto exchange, is throwing its weight behind stablecoins amid growing speculation that it could trigger mainstream adoption.

Stablecoins are often pegged with a fiat currency, meaning one unit can equate directly to 1 euro or $1. With new coins emerging all the time, the industry is evolving quickly, prompting the company to launch a stablecoin market in which its consumers can benefit from pairings with other cryptocurrencies.

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The crypto-only exchange now supports five stablecoins in total: Paxos Standard Token (PAX), TrueUSD (TUSD), USD Coin (USDC), StableUSD (USDS) and Tether (USDT).

As reported by Cointelegraph, Binance CEO Changpeng Zhao has been vocal about his support for stablecoins, as he believes they offer “far more freedom than traditional fiat for users” and help regulators maintain control. In November, the exchange introduced its combined Stablecoin Market, creating a place where a broader range of assets can be used as base pairs.

Binance asserts that “it is now often more efficient to buy cryptocurrency via stablecoins than through a fiat exchange” — not least because of how stablecoins are less susceptible to high transaction fees and market volatility.

The benefits

In explaining the rationale behind using stablecoins, Binance says that it can help eliminate the confusion that all too often swirls around conversion rates. Given how the prices of other coins and tokens can change dramatically in a matter of minutes, this increasingly popular form of cryptocurrency could help deliver the certainty that many everyday consumers want and expect. Over time, it could also enable the industry to build a compelling case for mainstream adoption — addressing some concerns that many digital assets amount to a store of value rather than a currency that can be used for everyday purchases.

Chasing mainstream adoption

Binance’s move into stablecoins is in reaction to growing interest from the crypto community. Indeed, as reported by Cointelegraph, a study released in February predicted that stablecoins are going to play an instrumental role in the mainstream adoption of this technology — something that has proven elusive so far.

The report forecasts that countries that have suffered from hyperinflation in the past, when fiat currencies suffered devaluation to the extent to which everyday essentials become unaffordable, are the likeliest to embrace stablecoins first. And several nations are currently in the throes of hyperinflation, including Venezuela, Zimbabwe and Angola.

A multi-faceted issue

Other categories in Maxonrow’s event — called MAXathon — focused on the economic impact of COVID-19. Although governments around the world have unveiled stimulus packages designed to help businesses and consumers who have been adversely affected by lockdown restrictions, some have found it difficult to access the help they’re entitled to. The winner of the Welfare category was a team called “Well and Fair,” which created an infrastructure that enables anyone to apply for grants or stimulus packages that suit their needs.

A competitive field

Maxonrow has said that people from more than 30 countries participated in the hackathon event. More than 40 projects were originally submitted, but this was whittled down to a shortlist of 17 potential candidates.

To decide the winners, a panel comprising seven judges was assembled: Holger Schmidt, an advisor at Strategy& of PricewaterhouseCoopers; Nisa Amoils, managing partner at Grasshopper Capital; Malte Schöenfeld, venture development manager at Audi; Robert Wiecko, the chief operating officer of Dash Core Group Inc.; Sebastian Diaconu and Muhammad Salman Anjum, CEO and managing director, respectively, of Avantas Tech; and Carlo Chung, the chief technology officer of Maxonrow.