The crypto market will likely shift to non-dollar stablecoins, says the CEO of Binance
Binance’s CEO, Changpeng Zhao, or “CZ,” has predicted that the cryptocurrency industry would “probably” begin utilizing stablecoins based on the euro, yen, or Singapore dollar in the future, shifting away from stablecoins based on the U.S. dollar.
The comment was made by CZ in response to a question on the crypto sector adopting gold as a measure of value in place of the US currency at a Twitter Spaces event on February 14. This is why stablecoins backed by the U.S. dollar are “still relevant,” since this is the currency most people use to measure the return on their investments.
Further, CZ speculated that algorithmic stablecoins might have a more significant position in the cryptocurrency ecosystem in the future. On the other hand, he warned that algorithmic stablecoins are “inherently going to have dangers” that are absent from fiat-backed stablecoins. CZ thinks users need to be made aware of these dangers and given information on the reserves for fiat-backed stablecoins. This allows “people to very clearly understand what’s going on” and make educated decisions about which stablecoins to store or utilize.
After the SEC claimed that Binance USD (BUSD), a stablecoin pegged to the U.S. dollar, was an unregistered “security” in violation of U.S. law, CZ made its remarks the next day. After losing its May peg to the U.S. dollar, the algorithmic stablecoin TerraUSD (UST) resulted in investor losses of approximately $20 billion.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.