Binance CEO shared his opinion on the current US crackdown on the stablecoin companies and noted that crypto companies may shift toward other dominant fiat-pegged stablecoins.
In the present time, US financial regulatory bodies are taking strict action against Stablecoin companies. In particular, New York’s NYDFS ordered Paxos to stop the minting of BUSD stablecoin & claimed that BUSD is security. Reportedly SEC is also planning to take action against Circle’s USDC stablecoin. In response to these issues, the Binance exchange is also planning to shift to other stablecoins.
On 14 Feb 2023, Binance CEO Changpeng Zhao (CZ) held a Twitter space discussion and there he talked about the ongoing US authorities’ crackdown on the stablecoin companies.
A Twitter space participant asked CZ to figure out an option to shift to gold-pegged stablecoin as a main crypto trading pair asset. CZ said that it is obviously a good idea but here we should not forget that the majority of people have investments in crypto assets in fiat value US dollars and also people calculate their profit & loss in fiat values, so it will not be easy to shift to gold pegged stablecoin.
According to CZ, if such regulatory action on stablecoins runs continuously then it will create pressure on the crypto sector to move toward fiat currencies like the euro, yen, and Singapore dollar-pegged stablecoins.
“I think given the current pressure and current stances taken by the regulators on the U.S. dollar-based stablecoins, I think that as you said the industry will probably move away to non-U.S.-dollar- based stablecoins,” CZ said.
CZ also shared his opinion on the algorithmic concept-based stablecoin and noted that such stablecoins may play an important role in the current situation but here it will not be easy to adopt blindly citing risks, as we saw in the case of TerraUSD stablecoin which failed in May 2022 during a high-pressure sell situation.