In the past weeks, it has been every other news that can cause panic for any cryptocurrency trader and other stakeholders. While the industry had before now suffered gradual acceptance as a sellable business opportunity to the vast majority, especially the baby boomers, its acceptance further declined after the FTX drama which had the organization file for bankruptcy. Investors have been concerned about crypto contagion spreading to the entire business since FTX's abrupt closure. Oh well! I wouldn’t blame anyone.
While these fears are gradually becoming a major concern, there might be a need for an extra measure to gain the trust of stakeholders again and, more importantly, create a safe industry for people to proceed with their transactions without possible fears and glitches. Binance, known for its dominance as the biggest exchange platform for cryptocurrencies, has considered a different approach to saving the industry.
This post will highlight the efforts Binance has put together to ensure other crypto platforms or traders don't fizzle out based on insecurity and possible loss. Before we get into all that scoop, it is pertinent to note that The Watchtower Dubai is the brain behind this post. They are a digital marketing and web development company that provides all-around web solutions to everyone interested.
How is Binance saving the crypto industry?
The industry recovery fund, established by cryptocurrency exchange Binance in the past week to support suffering players in the wake of FTX's disastrous bankruptcy, has added additional information.
Binance announced in a blog post that it will make an initial commitment of $1 billion to the recovery fund. The company added that if the need arises, it may eventually increase that amount to $2 billion.
Additionally, investment companies focused on cryptocurrencies, including Animoca Brands, Jump Crypto, and Polygon Ventures, have committed $50 million to this call. Binance CEO Changpeng Zhao stated that this call would be transparent, and he shared the public wallet address, demonstrating the company's initial commitment.
It was gathered from the public blockchain data that Binance's BUSD stablecoin now has a balance of about $1 billion, which clearly shows the mark of transparency that he has mentioned.
Zhao has emerged as a new industry savior, stepping into the void left by Bankman-Fried, whose company had purchased or made investments in several struggling crypto businesses, including BlockFi and Voyager Digital, before it collapsed.
What is BUSD Stablecoin?
According to the website of blockchain infrastructure provider Paxos, BUSD is a stablecoin that has been certified and governed by the New York State Department of Financial Services.
Binance created the fund to support the cryptocurrency market after FTX, the controversial exchange founded by businessman Sam Bankman-Fried, declared bankruptcy earlier this month.
According to Binance, the vehicle is intended to support businesses and initiatives that, "through no fault of their own, are facing major short-term financial difficulties" and is "not an investment fund." Zhao has already stated his intention to stop any additional "cascading contagion consequences" brought on by the failure of FTX.
This entire support process of funding created by Binance would last for six months to enable investors to gather weight toward stabilizing the crypto industry.
How has the crypto market responded to this input?
Well, perhaps they are yet to get the fever, or they are just less enthusiastic yet on these trails. In the cause of writing this piece, it was observed that the announcement didn't cause the cryptocurrency markets to react particularly.
While Ether's price was steady for the session, bitcoin gained 0.2% during the hour of its release; however, trading was observed to be low due to Americans celebrating Thanksgiving.
While the cryptocurrency market has been considered very volatile at this stage, the new strategy spearheaded by Binance's CEO should salvage the industry and, over time, gain the trust of investors and traders again.