The market for stablecoins is about to see a new participant shortly. Sam Bankman-Fried, founder and CEO of the cryptocurrency exchange FTX, recently gave an interview with The Big Whale in which he stated that the company is developing its own stablecoin.
Sam Bankman-Fried’s Statement:
The crypto billionaire, who has emerged as the savior of the digital asset market, has acknowledged that it is quite likely that they will build a crypto token whose value is related to another asset. He is widely regarded as the one who will save the digital asset industry. He said that his exchange, which runs its own native FTX coin (FTT), possesses the necessary ‘know-how’ to develop its own and is currently considering who would make the ideal partner with whom to collaborate.
He further added: “We know how to create a stablecoin. We’re just thinking about the best partner to do it with.”
Today, stablecoins have played an essential role in the expansion of the cryptocurrency and decentralized exchange markets, with dollar-pegged stablecoins serving as the cryptocurrency industry’s de facto reserve currency up until now. In addition, there has been a significant increase in the demand for stablecoins in the e-commerce and payment industries. This is because the fiat-backed tokens make it possible for users and retailers to avoid price fluctuations. In addition, online merchants and payment gateways benefited from transactions completed more quickly and at a lower cost when compared to credit cards and other traditional payment methods.
The rising popularity of decentralized finance (DeFi) and over-the-counter (OTC) desks that use the token to settle block trades has been a significant factor in the development of this trend.
The planned stablecoin from FTX will compete against stablecoins issued by other prominent cryptocurrency exchanges, such as Binance’s BUSD and Circle’s USD Coin (USDC), the latter supported by Coinbase, the most significant cryptocurrency exchange in the United States.
Bankman-Fried floats the idea while FTX is reportedly discussing with a clutch of heavyweights from traditional finance to raise $1 billion in fresh funding to fuel more deal-making. Bankman-idea Fried also mentions that FTX is reportedly in discussions with these heavyweights.
The crypto conglomerate would maintain the same valuation it had after receiving $400 million in fundraising in January if it were to receive the new capital injection, which is still subject to talks. The cryptocurrency exchange Sam Bankman-Fried had first established was estimated to be worth $32 billion.
The global trading revenue earned by FTX reportedly reached $1.02 billion in 2021, having climbed by more than 10 times from the $89 million recorded in 2020. However, the financial documents relating to this matter were stolen. Additionally, during the bull run of the previous year, FTX’s operating income increased from $14 million the previous year to a whopping $272 million. The company’s net income increased to $388 million in 2018, a significant increase from just $17 million in 2020.
To put this into perspective, Coinbase’s losses for the second quarter of 2022 totaled $1.1 billion, while the company reported sales of $803 million. The publicly traded exchange, which had sales of $7.4 billion and a net income of $3.6 billion in the previous fiscal year, suffered a loss of this magnitude for the second consecutive quarter due to the outcomes.
