CEO of Binance: Investors Turning to Non-USD-Pegged and Algorithmic Stablecoins
Changpeng Zhao, the CEO of Binance, addressed the current regulatory pressure that its stablecoin BUSD is facing.
He also highlighted that investors may turn to non-US dollar-pegged and algorithmic stablecoins in the future.
Why stablecoins are important
According to Zhao, stablecoins remain essential in the industry, as most people’s costs are still calculated in fiat currencies.
The US dollar stablecoin is the most popular and prominent. Most people use US dollar prices when calculating cryptocurrency returns and costs.
The declining popularity of US-pegged stablecoins
However, due to regulatory pressures on US dollar-based stablecoins, Zhao believes the popularity of these assets may decline, and the industry may move towards non-US dollar-based and algorithmic stablecoins.
The New York Department of Financial Services (NYDFS) recently ordered Paxos, the firm issuing and operating BUSD in partnership with Binance, to stop minting the stablecoin for violating investor protection laws.
Looking for Other Options
Zhao further explains that industry players will be forced to look for other stablecoin options.
The collapse of the TerraUSD (USTC) stablecoin, further exacerbated by the crash of the FTX exchange, may have prompted this shift towards non-US dollar-based stablecoins.
He says the development will likely lead to more Euro-based or Japanese yen and Singapore dollar-based products. Binance is also looking at more options in different places, including algo stablecoins.