Changpeng Zhao (the CEO of the crypto exchange Binance) has anticipated a major shift in the stablecoin space in the coming time.
He stated that the crypto market would likely begin utilizing Singapore dollar, yen, or euro-based stablecoins in the future. As per the CEO of the top crypto exchange, this will pave the way for a minimized dependence on the USD.
The CEO of Binance predicts a Shift from USD-Based Stablecoins to the Other Alternatives
In his statement, Zhao responded to a question on the utilization of gold for a value standard rather than the US dollar. Zhao acknowledged that utilizing the top precious metal is also reasonable.
Nonetheless, he added, the majority of the payments are still being carried out in dollars by the people. This is the reason responsible for the significance of the stablecoins that are supported by the US dollar, Zhao stated.
Nonetheless, the Binance CEO touched on the topic related to the recent moves taken by the US authorities to confront the stablecoins backed by the United States dollar.
The executive mentioned that these measures would likely pave the way to the reliance of the worldwide crypto market on the rest of the currencies like the Singapore dollar, Yen, and Euro for supporting the stablecoins.
The executive disclosed that, in line with the present pressure as well as the stances taken by the regulatory agencies on the stablecoins pegged to the USD, it would push the crypto community toward the alternatives.
He added that an important role might also be played by the algorithmic stablecoins in the further progress of the crypto ecosystem. Nonetheless, the CEO expressed a warning regarding these stablecoins.
As per the executive, they are inherently prone to the risks which are not faced by the other stablecoins, which are supported by the fiat currencies.
According to Zhao, the respective risks required to be revealed transparently to the consumers. In addition to this, he also pointed toward the need for the disclosure of the reserves allocated for the stablecoins supported by the fiat currencies.
That is how the consumers can unambiguously determine the choice of stablecoins for use and holding. The statements made by Zhao were witnessed only a day following the accusation raised by the US SEC that Binance USD, the stablecoin pegged to the US dollar, was among the unlicensed securities in line with US laws.
Zhao Recommends Crypto Industry’s Unity to Prevent More Events Like TerraUSD Crash
Apart from welcoming the stablecoin substitutes, Zhao eventually supported additional competition and diffusion in the industry. He moved on to say that the stablecoins should not be blamed, but communication and transparency with the clients would be the most important thing to prevent another incident like TerraUSD (UST) collapse.
While discussing the loss of the peg by a stablecoin, he pointed toward an economic opportunity for those who lose additional funds for the maintenance of the peg.
In this way, he considers that the more reasonable decision should be made in line with economics. He added that the industry requires getting united to explore collective solutions as this is a huge subject.
In his words, the current year will witness additional regulatory scrutiny in the crypto industry. Hence, a drastic shift from no regulatory measures to tightened regulatory actions is likely to be seen during 2023.
Zhao additionally asserted that the media is getting wild nowadays, and different outlets pit against each other for several reasons. Thus, the community should cautiously stay at a distance from their trap.
