Binance to develop Libra-like digital currencies, hints at focus on countries including China

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(Image credit: BigStock/alexgrec)

Cryptocurrency exchange Binance announced on Monday a new initiative, dubbed “Venus,” which aims to develop localized stablecoins and digital assets pegged to fiat currencies across the world. The company is expected to focus on markets including China and India.

Why it matters: Facebook’s release of Libra’s whitepaper in mid-June spurred a worldwide push for digital currencies.

  • The Chinese government is accelerating the development of a central bank-issued digital currency, which is expected to aid the internationalization of the Chinese yuan.
  • Currently, the majority of stablecoins are pegged to the US dollar, which many fear furthers the US’ economic clout and its grip on the global economy.
  • Binance, the world’s largest cryptocurrency exchange by traded value, sees an opportunity to enable developing countries to gain more financial autonomy by helping them create new digital currencies.
  • The new project is said to be similar to Facebook’s Libra. However, Binance CEO Zhao Changpeng said the initiative aims not to dominate but rather push adoption of digital currencies.

Pushing adoption, yes. Domination, no. Always happy to co-exist. In fact, this should help Libra, if you think about it. Will leave it at that.”

Zhao Changpeng, founder and CEO of Binance, wrote in a Tweet on Monday.

INSIGHTS | China’s digital currency: A foundation for 21st-century global leadership

Details: The Malta-based cryptocurrency exchange noted that different versions of Libra are now being explored by governments around the world.

  • The company said that these projects will reshape the global financial system, giving rise to a revolution greater than the internet. It is better to embrace the change, the company added, citing Shenzhen’s move to explore the market economy as an example.
  • In its Chinse-language announcement, Binance defined Venus as the “regional version of Libra,” which aims to break down financial hegemony and reshape the world’s financial system.
  • According to the company, the initiative will leverage its existing infrastructures such as its public chain Binance Chain and cross-border payment systems. However, it did not provide a timeline for the new project.
  • He Yi, co-founder of Binance, reportedly called Venus the “one-belt-one-road version of Libra.”
  • From Zhao and other co-founders’ cryptic posts on social media, Venus could be focused on countries that Libra will likely have difficulty entering, including China and India.

Context: Earlier this month, the Central Committee of the Communist Party and the State Council, China’s cabinet, released a new guideline for the development of the Shenzhen Special Economic Zone, which includes research focused on China’s proposed digital fiat currency as a key part of its plan.

  • An official from China’s central bank recently said that the country’s planned digital fiat currency is “nearly ready” for release after five years of research and development.
  • Originally founded in China, Binance moved several times after the country tightened cryptocurrency and exchange services regulations in 2017. The company eventually settled in the Mediterranean island nation of Malta last year.