June 3, 2023

Non-Dollar Stablecoins have a Bright Future, Says Binance CEO

Binance CEO has issued a new statement about the future of stablecoins in the realm of the DeFi sector. The CEO of the cryptocurrency exchange has claimed that the next big development in the stablecoin market will be seen in the tokens that are not pegged to US Dollar.

He added that in the future, investors are bound to gravitate towards the stablecoins that are pegged to the yen, euro, or Singaporean dollar.

The statement from the head of cryptocurrency exchange has arrived following the reaction from SEC against BUSD. To this end, CZ has maintained that most cryptocurrency investors are likely to move towards the stablecoins that are pegged to other fiat currencies instead of the US dollar.

Regulatory Crackdown

The regulatory crackdown on stablecoins in the USA has prompted the cryptocurrency exchange to predict decreasing demand.

CZ said that using commodities like gold to back stablecoins makes more sense rather than using US Dollar as a peg. He was replying to a question on the Twitter space about the adoption of the Gold standard in crypto markets.

He maintained that despite the gold standard, most people calculate their return on crypto investment in USD.

According to the crypto exchange executive, the main reason that US Dollar backed stablecoins still hold value in the markets is the reliance of cryptocurrency investors on fiat conversion of their crypto trading profits.

The last stablecoin project targeted by SEC regulators was Terra LUNA. Crashing of the Terra USD project generated an accumulated loss of $20 billion for cryptocurrency investors.

A few days ago, SEC regulators started BUSD, a stablecoin backed by US Dollar. As per SEC accusations, the project is operating as an unregistered security.

On the matter, CZ interjected that algorithmic stablecoins would be able to shield DeFi stakeholders from regulatory interference. He acknowledged that algorithmic stablecoins are subjected to risks that are not present in fiat-backed stablecoins.

He told the media that exchanges need to disclose the possible risks for fiat and algorithmic stablecoins in the spirit of transparency.

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