Binance Boss Changpeng Zhao: Stablecoin Crypto Bakal Is Pegged To Currency Other Than The US Dollar

Binance CEO Changpeng Zhao. (Photo; Doc. AZCoin)

JAKARTA - The crypto industry may switch to a non-dolar stablecoin after the ongoing BUSD drama, according to Binance CEO Changpeng Zhao. At the Twitter Spaces event yesterday, Zhao said that the crypto ecosystem could start using stablecoins pegged to other currencies, such as euros, Singapore dollars, or yen. This will reduce dependence on US dollar-based tokens.

According to Zhao, regulatory pressure on US dollar-based stablecoins prompted the industry to look for other options in different places. "As a result, we will probably see more euro-based stablecoins or other Japanese yen, Singapore dollar-based stablecoins," he said.

Binance's CEO also discussed the crypto industry using gold as a standard value, not a US dollar. Although he admits that using gold makes sense, Zhao explains that "most people still use fiat currencies." As a result, as most investment proceeds are based on the dollar, dollar-backed stablecoins are becoming critical.

In addition to non-dolar stablecoins, Binance CEO argues that algorithmic stablecoins can also play a more significant role in the future. However, Zhao warns that stablecoins pegged in this US dollar inherently will pose risks that are not owned by fiat-supported stablecoins.

Therefore, Zhao believes that users need to know these risks so they can "clearly decide what is going on" regarding the use of stablecoins. In conclusion, Zhao invites all crypto industry players to consider security and reliability in choosing the type of stablecoin to be used.

Binance CEO Changpeng Zhao's statement responded to criticism sent by the Securities and Exchange Commission (SEC) against the BUSD stablecoin. The dispute comes after US regulators issued a Wells Notice to Paxos, a BUSD issuer, for violating investor protection rights by issuing unregistered securities. Although Paxos has yet to provide a response, a Binance spokesperson confirmed that Binance only licenses its brand to Paxos, which owns and publishes the product.

At the time, a Binance spokesperson also added that Paxos was under the regulation of the New York Department of Financial Services (NYDFS) and that Binance would continue to monitor the SEC-Paxos situation. Binance CEO Zhao stressed that BUSD is safe and fully protected by ratified bank reserves. Although Paxos is directed by NYDFS to stop printing further BUSD tokens amid SEC allegations Zhao remains expressing ongoing support for BUSD "for the future."

Zhao also believes that the SEC's investigation of BUSD will trigger a decline in coins over time and result in the movement of the crypto industry. However, he also said that customers can expect necessary product adjustments when users eventually switch to other stablecoins. Thus, Binance expressed support for Paxos and BUSD, which is an important safety net for investors seeking protection from volatile markets, while ensuring to monitor the situation and adjust the product when needed.