Binance CEO Changpeng Zhao believes that due to the recent nitpicking of US regulators on BUSD, the industry may switch to stablecoins pegged to other fiat currencies.
Speaking at the Twitter Spaces event, Changpeng Zhao reasoned that most people still make payments and settlements in fiat currencies, so they measure the return on their investments in dollars. In this regard, dollar-backed stablecoins are essential.
However, due to the recent demand from the New York State Department of Financial Services (NYDFS) to stop issuing the BUSD stablecoin, stablecoins backed by the euro, the Japanese yen or the Singapore dollar will become especially popular in the crypto space, Zhao suggested. This will reduce the industry’s dependence on stable cryptocurrencies pegged to the US dollar. In this case, instead of the dollar, gold will do, Zhao added.
“Given the regulatory pressure on dollar-denominated stablecoins, the crypto industry will be forced to look elsewhere,” Zhao said.
The CEO of Binance noted that algorithmic stablecoins can also play an important role in the development of the cryptocurrency ecosystem. However, he warned that they are subject to certain risks that fiat-backed stablecoins do not. Zhao believes that in any case, stablecoin issuers should disclose detailed information to investors so that they can decide for themselves which stablecoins to invest in.
Cardano founder Charles Hoskinson also sees algorithmic stablecoins as useful. In his opinion, they are able to destroy the monopoly of state currencies, despite possible failures.
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