Cryptocurrency exchange FTX is reportedly developing its own stablecoin.
FTX Chief Executive Officer (CEO) Sam Bankman-Fried discussed plans for a stablecoin in a recent media interview.
Stablecoins are cryptocurrencies pegged to the value of another asset, typically the U.S. dollar or price of gold.
Currently, FTX offers margin trading that enables people to use a basket of U.S. dollar stablecoins as collateral. The basket includes stablecoins such as TrueUSD (TUSD), USD Coin (USDC), and Pax Dollar (USDP).
But now, FTX is looking to launch its own proprietary stablecoin, according to comments made by Sam Bankman-Fried.
FTX’s efforts to create a stablecoin come after rival cryptocurrency exchange Binance issued its own stablecoin, called “Binance USD” (BUSD), in 2019.
While viewed as more stable than traditional cryptocurrencies, stablecoins are not without risk.
One prominent stablecoin, TerraUSD (USTC), collapsed this past summer after it lost its peg to the U.S. dollar.
Tether (USDT), the largest stablecoin in the world with a market capitalization of $68 billion U.S., is owned by iFinex, a Hong Kong holding company.
Despite the current downturn in cryptocurrency prices, FTX has made several acquisitions in recent months, including a deal to buy cryptocurrency lending business BlockFi for $240 million U.S.
