Binance CEO Believes Investors Will Shift to Non-USD Stablecoins
- Binance CEO Changpeng Zhao stated that the crypto industry will gradually move to non-dollar stablecoins.
- CZ noted that dollar-backed stablecoins are “still important” as “most people’s costs are still in fiat currencies.”
- He predicted that the industry will gradually rely on other currencies like Euro, Yen, and Singapore Dollar to create stablecoins.
- Zhao stated that algorithmic stablecoins will also have their place in the crypto market but cautioned that they are “inherently gonna have risks.”
The world’s largest crypto exchange, Binance, had made headlines earlier this week when the US Securities and Exchange Commission (SEC) issued a Wells Notice to the owner of the BUSD stablecoin, Paxos. Interestingly, the blockchain payments company based in New York will no longer create and issue the BUSD stablecoin. Interestingly, CEO Changpeng Zhao, also known as CZ in the crypto space, stated that the industry will gradually move to non-dollar stablecoins.
In a Twitter Spaces on Feb. 14, CZ stated that the crypto industry around the world will gradually move towards non-USD stablecoins. When asked a question about the crypto industry using gold as a standard of value instead of the US Dollar, the Binance executive stated that it “makes sense” to use gold while noting that most people determine their net worth and portfolio in fiat currencies like dollars.
CZ noted that dollar-backed stablecoins are “still important” as “most people’s costs are still in fiat currencies” and they calculate their returns in profit or loss in terms of fiat. However, the Binance co-founder believes that due to the recent actions taken by the US authorities against the existence of dollar-based stablecoins, the crypto industry will gradually rely on other currencies such as the Euro, Yen, and Singapore Dollar which will be used to back stablecoins.
“I think given the current pressure and current stances taken by the regulators on the US Dollar based stablecoins, I think that as you said the industry will probably move away to non US dollar based stablecoins[…]as a result of this we probably will see more euro based or other Japanese yen, Singapore dollar based stablecoins, so it’s actually prompted us to look for more options in different places,” said CZ.
Interestingly, Zhao stated that algorithmic stablecoins will also have their place in the crypto market in the near future but he cautioned that they are “inherently gonna have risks.” This can be confirmed from the collapse of several algorithmic stablecoins in 2022 like the UST, USDN, and others. The collapse of Terra was one of the biggest financial disasters around the globe.
The Binance CEO stated that the only way for algorithmic stablecoins to work is that the creators reveal the risks to the users in a transparent manner allowing them to “clearly decide what is going on” and make up their own minds about which stablecoins they want to add to their portfolio.
These statements from the Binance boss came just a day after Paxos confirmed that it will stop issuing BUSD due the instructions from the New York Department of Financial Services (NYDFS). Moreover, the SEC also claimed that BUSD can be considered as an unregistered security.
Paxos confirmed it would stop minting BUSD on February 21 and would follow the NYDFS’ directives. The blockchain infrastructure company noted that all existing BUSD tokens will be fully backed and redeemable through Paxos Trust until “at least February 2024.”
“Binance will continue to support BUSD for the foreseeable future. We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading,” said CZ while adding that “we will be reviewing other projects in those jurisdictions to ensure our users are insulated from any undue harm,” said CZ in a Twitter post.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
