The Bancor Network (BNT) is taking a major step to integrate cryptocurrency and fiat currency with PEG (PEG).
To clarfiy, Bancor has launched its own stablecoin solution called the PEG Network. In detail, the PEG (PEG) Token is apparently an ERC (Ethereum-based) cryptocurrency pegged to BNT tokens.
Uniquely, each PEG Token has a 7% weighted connector of BNT Tokens. Thus, the creators partially back PEG with BNT Tokens. Moreover, the Peg Network claims you can convert PEG Tokens into any ERC Token via the Bancor Liquidity Network.
Will Peg (PEG) add Value to Bancor (BNT)?
To explain, the Liquidity Network enables a person to instantly convert ERC Tokens into spendable cash. In this case, the spendable cash is Ethereum (ETH) the second most popular cryptocurrency.
Additionally, PEG acts like a bank enabling anybody to borrow against tokens pegged to a real-world (fiat) currency. In other words, PEG is a stablecoin you can borrow against. To borrow or lend a person will have to store the tokens into a “Vault.”
Notably, Peg enables anybody to become an internet “banker” or Vault Creator. Interestingly, a mechanism called Peg Instance will determine the value of the PEG Tokens. The Peg Instance is a management layer that will control settlement of Peg Transactions and maintain the value of the asset-based tokens.
If PEG (PEG) works as advertised anybody could initiate a PEG Instance, Deposit PEG into a vault as collateral, mint asset-based pegged tokens, and trade newly mined tokens on PEG.USD.com.
If this system works like PEG claims people could hedge their crypto against an asset to create liquidity for trading and to stabilize prices. Thus the PEG Network can supposedly create stablecoins. To explain a Stablecoin is a cryptocurrency where an outside asset like a fiat currency protects the value.
Meet PEG US Dollar (PEGUSD) the first PEG Stablecoin for Bancor
The first PEG Stablecoin linked to the Bancor Liquidity Network the PEG US Dollar (PEGUSD) and created by PEG is here. Interestingly, the PEG US Dollar (PEGUSD) is “pegged” to the US Dollar (USD).
To clarify, “pegged” means PEGUSD’s price is as close to the dollar as possible. For instance, Bancor gave PEGUSD a Coin Price of 99.5¢ on November 12, 2018.
Moreover, the PEG Foundation, the Swiss organization behind PEG has created the PEG.USD DEX, a decentralized exchange for PEGUSD. Interestingly, the BNT and another stablecoin called the Dai (DAI) are among the tokens that trade on PEG.USD DEX.
Like PEG and Bancor, the PEGUSD is an Ethereum based Token that is readily convertible to other ERC20, ERC223, or ERC721 Tokens. The creators designed PEG.USD to add an extra layer of stability to PEG and Bancor by linking them to the dollar.
A smart move for PEG will be to create PEG stablecoins linked to currencies other than the dollar. I think the big three dollar alternatives in stablecoins will be the Euro, the Pound Sterling, and the Swiss Franc.
People all over the world trust all three fiat currencies, and the Euro and Swiss Franc are potentially more stable than the dollar. To clarify, the dollar is vulnerable to American political and economic instability, which is greater than many people assume.
How PEG (PEG) will Enable Ethereum-based Lending and Factoring
To explain, ERC stands for Ethereum Request for Comments. Thus an ERC20 or ERC721 Token is actually a request for payment.
Therefore, an obvious use of PEG and Bancor will be to convert ERC tokens into invoices. The invoices will be self-executing Ethereum smart contracts that can automatically accept payment in Ether (ETH), Bancor (BNT), or a fiat currency via a stablecoin.
For instance, businesses could use those invoices as collateral for loans in factoring. Factoring is the lending of money against inventory or unpaid invoices. Hence, PEG could enable any business to factor its own merchandise or invoices.
First, a business will create a PEG Vault and store ERC tokens backed by its inventory, real estate, cash, or invoices there. Second, the business will borrow against those assets and use ERC tokens or a PEG stablecoin to pay the loans.
PEG (PEG) could be an Incredibly Disruptive Token
Even though it is not yet being tracked by CoinMarketCap, the PEG is potentially a disruptive altcoin.
PEG will be disruptive because it will allow large numbers of people to become cryptocurrency lenders, factors, and bankers by minting their own tokens. For instance, a factor who buys invoices from businesses could sell that debt by minting it into PEG or ERC tokens.
Hence, PEG will let anybody mine cryptocurrency, back it with fiat currency, and borrow money against it. Thus, a good way to think of PEG is as a “bank in a box” or a “bank in an app.” Instead, of going to a bank you will create a bank using app on your phone.
Moreover, it could be possible to use PEG and PEGUSD to link ERC directly to stablecoins via Bancor’s Liquidity Network. Thus, Ethereum platforms could convert ERC20, ERC223 and ERC771 Tokens into fiat currency in a few seconds or minutes.
For instance, a person could use PEGUSD and Bancor to purchase weapons or tools on an Ethereum gaming platform. In addition, an Ethereum gambling platform could quickly convert winnings into fiat currency.
Bank in an App at PEG (PEG)
Obviously, neither the banking industry nor central banks will like that. Notably, central banks in India and China are already trying to ban private cryptocurrencies.
An inherent promise in solutions like PEG and BABB (BAX) is the ability to create an alternate banking system via the blockchain. The difference is that BABB admits it is building banks while PEG tries to evade the issue.
Such an alternative banking system will be of incredible value in developing nations with no banks such as the Middle East. It will also be popular in countries like Venezuela and Zimbabwe where the financial and monetary systems are dysfunctional.
How valuable is the Bancor Protocol?
PEG (PEG) and PEG US Dollar (PEGUSD) are among many ERC20 cryptocurrencies that utilize the Bancor Protocol.
The Bancor Protocol gives ERC20 Tokens liquidity through the BANCOR Liquidity Network. Thus any token using the Bancor Protocol could convert to PEG (PEG), PEG US Dollar (PEGUSD), BNT, and dozens of other ERC20 tokens. Importantly, businesses can track the liquidity of those tokens with Bancor’s website.
Interestingly, Bancor provides a glimpse of PEG and PEGUSD’s value. Bancor priced PEG at 16.7¢ and PEGUSD at 99.5¢ on November 12, 2018. The 99.5¢ Coin Price shows that PEGUSD is a successful stablecoin because it is worth nearly $1 USD.
In detail, Bancor gave PEG (PEG) a Liquidity Depth (value) of $1.228 million and PEGUSD (PEGUSD) a Liquidity Depth of $448,560 on 12 November 2018. Moreover, Bancor reports PEG had a 24-Hour Market Volume of $2,947 and PEGUSD achieved a 24-Hour Market Volume of $20,403 on 12 November 2018.
PEG (PEG), PEGUSD, and Bancor are good coins for Speculators
Interestingly, Bancor gave its BNT Token a Coin Price of $1.33, a 24-Hour Market Volume of $830,566 and a Liquidity Depth of $10.389 million on November 12, 2018.
Conversely, CoinMarketCap estimates Bancor had a Coin Price of $1.32, a Market Capitalization of $87 million, and a 24-Hour Market Volume of $1.870 million on 12 November 2018.
Moreover, there was a Circulating Supply of 65.382 million BNT and a Total Supply of $78.052 million BNT on November 12, 2018. On the other hand, CoinMarketCap ranked Bancor as the 71st most valuable cryptocurrency on that date.
I think Bancor, PEG, and PEGUSD are good cryptocurrencies for speculators based on these numbers. These altcoins have real value and they’re not attracting much market attention.
Therefore, you could make a little by buying and holding Bancor, PEG, and PEGUSD. However, it could take quite a while for these coins to obtain a lot of value so they are not for the impatient.