Changpeng Zhao Makes Stablecoin Prediction Following SECs Binance USD (BUSD) Enforcement Action

The CEO of crypto exchange giant Binance has said that amid regulatory pressure on Binance USD (BUSD), investors may turn to algorithmic stablecoins that are not pegged to the U.S. dollar.

inside Twitter Space AMA On February 14th, Changpeng Zhao explains why USD-pegged stablecoins are so widely used.

Stablecoins are still important. Most peoples costs are still fiat currency, so when calculating revenue, ROI, etc., when calculating the price today, most people put cryptocurrencies in USD price. We will use it because the USD stablecoin is the most popular and largest.

Zhao’s statement states that the U.S. Securities and Exchange Commission (SEC) will launch enforcement action against Paxos, a cryptocurrency company that issues and manages BUSD in partnership with Binance, for violating investor protection laws. We have received a report that we are considering

The New York Department of Financial Services (NYDFS) has also ordered Paxos to stop issuing stablecoins.

Zhao said the popularity of US-pegged stablecoins could decline as regulators crack down on these assets.

Given the current pressure and current stance of regulators on USD-based stablecoins, I think the industry will probably move to non-USD-based stablecoins and possibly back to algorithmic (algorithmic) stablecoins.

The development likely relates to or began around the time the TerraUSD (USTC) stablecoin collapsed, which was made worse by the FTX exchange crash, he says.

Fundamentally, I think this will force industry players to look for other options, such as more algorithmically stable coins, rather than USD-based

As a result, we will probably see more euro-based, Japanese yen-based, and Singapore dollar-based stablecoins. In fact, it prompted me to look for more options in various places.

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