According to Changpeng Zhao, the CEO of Binance, the crypto industry would “probably” begin adopting stablecoins based on the euro, yen, or Singapore dollar in the future, lessening its reliance on stablecoins based on the US dollar.
CZ made the declaration during a Twitter Spaces event on February 14 in response to a query regarding the cryptocurrency industry’s use of gold as a unit of measure rather than the US dollar. CZ claims that the use of gold makes sense. But “the majority of costs are still in fiat currencies.” The majority of investors compute their returns on investments in dollars as a result, which is why U.S. dollar-backed stablecoins are “still crucial.”
The U.S. government’s recent efforts against U.S. dollar stablecoins, according to CZ, would likely push the entire crypto sector to rely on other currencies like the euro, yen, and Singapore dollar to back stablecoins.
According to CZ, algorithmic stablecoins might also have a bigger impact on the crypto ecosystem in the future. He did warn that algorithmic stablecoins “inherently going to have hazards” that aren’t present in fiat-backed stablecoins. In CZ’s opinion, users need to be transparently informed of these dangers, as well as the reserves for fiat-backed stablecoins. This manner, users can very clearly decide what is going on and choose the stablecoins they want to hold or employ for their own purposes.
CZ’s comments come the day after the SEC claimed that Binance USD (BUSD), a stablecoin based on the US dollar, had not been properly registered as a “security” under US law. In May, the algorithmic stablecoin TerraUSD (UST) lost its peg to the dollar, resulting in investor losses of almost $20 billion.
