Binance CEO Changpeng Zhao, otherwise known as “CZ,” expressed in a statement on Twitter Spaces that the cryptocurrency industry may start turning to Euro, Yen, or Singapore dollar-based stablecoins over time and diminish its reliance on US dollar-based stablecoins.
When asked if the crypto industry should consider using gold as a basis of value rather than the US Dollar, CZ concurred that it was an intelligent choice. Nevertheless, he pointed out that most people still depend on fiat currencies for their daily expenditures and therefore prefer to gauge their investment gains in dollars, which is why stablecoins backed by the USD still remain indispensable for now.
Meanwhile, CZ believes that the US government’s latest actions against dollar-backed stablecoins will lead to a switch in global cryptocurrency reliance towards other currencies such as the Euro, Yen, and Singapore Dollar.
“Considering the heightened scrutiny of US dollar-based stablecoins, I believe that our industry will be driven to explore other non-dollar-based options like euro or yen-backed tokens. This has prompted us to look for alternatives from different regions and jurisdictions.”
Changpeng Zhao
CZ asserted that in the near future, algorithmic stablecoins might become a more prevalent part of the crypto ecosystem. However, he warned that they “inherently contain risks” which fiat-backed stablecoins do not possess and should be disclosed transparently to ensure users are aware so they can make an informed decision when deciding which type of coin to use or hold.
CZ’s remarks came just one day after the SEC charged US Dollar-based stablecoin Binance USD (BUSD) as an unregistered security violating U.S. laws. The algorithmic TerraUSD (UST) had already detached its peg to the dollar back in May, leading to about $20 billion loss for investors globally.
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