The recent actions of the United States Securities and Exchange Commission (SEC) will not be without consequences for all stablecoins dependent on the United States dollar, according to Changpeng Zhao. The CEO of Binance has made it known that stablecoins focused on other currencies should be favored in the future, and that the return of algorithmic stablecoins is not excluded either.
Binance CEO reacts to regulators’ decisions
Changpeng Zhao, CEO of Binance, reacted to the recent rampage of the U.S. Securities and Exchange Commission (SEC) and increasing general pressure from regulators on U.S. dollar-pegged stablecoins. During a Twitter Space, he spoke at length on this subject in the context of an exchange in the form of questions and answers.
“The amount of pressure on stablecoins is quite significant. Multiple agencies are putting pressure on it. […] This will shrink the USD stablecoin market, so the industry is exploring its options. »
As far as he is concerned, CZ has been directly affected by recent moves by the SEC, with the latter blaming Paxos, the company issuing Binance’s BUSD stablecoin, not having declared the latter as a transferable security. As a result, Paxos has pledged to stop distributing BUSDalthough it categorically disputes the classification of the stablecoin as a security.
The CEO of Binance recalled that faced with the pressure exerted by the various regulators, the American market (mechanically dependent on the dollar) should gradually be abandoned in favor of other fiduciary currencies. As such, he mentioned the euro, the Japanese yen as well as the Singaporean dollar.
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Changpeng Zhao sees the future in algorithmic stablecoins
Later in the discussion, CZ mentioned algorithmic stablecoins. According to him, the different pressures that we observe today are primarily the result of the collapse of the Terra ecosystem last yearthe UST and the LUNA having failed to insure each other.
Although this event was traumatic for the entire ecosystem and caused a severe breath of distrust to grow in the class of algorithmic stablecoins, the latter could however return in the face of pressure from regulatorsaccording to Changpeng Zhao.
On the other hand, let’s also point out that CZ revealed that BUSD was more of an early idea coming from Paxos than Binance, adding that “ BUSD has never been a very good deal for us “.
Finally, regarding the exodus of users who massively burned their BUSD against US dollars, the CEO of Binance said that it was “ a good thing » that the holders of the stablecoin are able to exchange it without it impacting the value of their portfolio.
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Source: Bloomberg
Simage source: Web Summit via Flickr, Attribution 2.0 Generic (CC BY 2.0)
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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