FTX to launch its own stablecoin soon, says Sam Bankman-Fried
The stablecoin market is welcoming a new player soon. Crypto exchange FTX is reportedly working on its very own stablecoin, founder and CEO Sam Bankman-Fried said in a recent interview with The Big Whale .
The crypto billionaire, who has emerged as the savior of the digital asset industry, confirmed that it is very likely they will create a crypto token whose value is tied to another asset. He added that his exchange – which operates its native FTX token (FTT) – possesses the relevant ‘know-how’ to create one and is thinking about the best partner to work with.
“We know how to create a stablecoin. We’re just thinking about the best partner to do it with,” he said.
Stablecoins have been a core part of the growth story for crypto and DeFi, with US dollar-pegged stablecoins being the de facto reserve currency of crypto thus far. Also, demand for stablecoins in the e-commerce and payment space has been surging as the fiat-backed tokens allow users and merchants to avoid volatility. Moreover, online retailers and payment gateways benefited from faster, cheaper transactions as compared to credit cards and traditional payment systems.
This trend was driven by growing interest in decentralized finance (DeFi) and OTC desks that use the token to settle block trades over-the-counter.
FTX’s proposed stablecoin will go against other big crypto exchanges’ coins including major rivals, Binance’s BUSD and Circle’s USD Coin (USDC) stablecoin, which is backed by Coinbase, the largest cryptocurrency exchange in the US.
Bankman-Fried floats the idea just as FTX is reportedly in discussions with a clutch of heavyweights from traditional finance to raise up to $1 billion in fresh funding to fuel more deal-making.
The fresh capital injection, which is still subject to negotiations, would keep the crypto conglomerate at the same valuation it had landed after a $400 million funding round back in January. At the time, the cryptocurrency exchange founded by Sam Bankman-Fried was valued at $32 billion.
According to leaked financial documents, global trading revenue generated by FTX hit $1.02 billion in 2021, having increased more than 10 times from the $89 million recorded in 2020. Additionally, FTX’s operating income swallowed $272 million throughout last year’s bull run from $14 million a year earlier. FTX saw net income of $388 million last year, up from just $17 million in 2020.
By way of comparison, Coinbase posted a loss of $1.1 billion on revenue of $803 million for the second quarter of 2022. The results amounted to the second consecutive quarterly loss for the publicly traded exchange, which posted $7.4 billion in revenue and $3.6 billion of net income last year.