Binance is said to be issuing a bitcoin (BTC) linked token on Binance Chain, the native blockchain on which the Binance DEX exchange is running. In this way the decentralized exchange can realize the trade in bitcoin. Binance announces this in an announcement that was published on 17 June.
Binance DEX is the decentralized version of Binance.com. The exchange is not controlled by a central party, as is the case with Binance.com. This brings additional benefits, especially in the area of privacy and security.
However, a problem is that Binance DEX is based on its own blockchain , the Binance Chain. This means that only tokens with the BEP2 standard can be traded on this blockchain. Binance solves this in a smart way.
It releases a bitcoin linked token that does have the BEP2 standard. In this way, traders can still trade bitcoin by trading this token. The value of the token is directly linked to bitcoin and Binance keeps as many bitcoins in reserve as there are tokens in circulation. Thus it can guarantee that the token is 100% covered with real bitcoins. In the announcement Binance writes:
The main advantage of offering crypto-pegged tokens is that this, of course, provides the Binance DEX traders with the many cryptos that have their own block chains and are not native to Binance Chain. With the increase in the selection of tokens available on Binance DEX, there should be an increase in trading volume and liquidity,
Binance has reserved 9001 BTC with a combined value of approximately $ 83 million to create 9001 BTCB. Binance also reports that in the near future it will make multiple versions of these tokens that are linked to other cryptocurrencies .