Changpeng Zhao Predicts Stablecoin After SEC Action On BUSD

Binance’s CEO believes investors may switch to non-US dollar-pegged and algorithmic stablecoins under regulatory pressure on Binance USD (BUSD).

Changpeng Zhao discusses why USD-pegged stablecoins are popular in a February 14th Twitter Spaces AMA.

“Stablecoins are still important. Most people’s costs are still in fiat currencies and so when they calculate returns, ROI, et cetera, when they calculate prices today, most people use US dollar prices for crypto because US dollar stablecoins are the most popular and the largest.”

Zhao’s comment follows allegations that the SEC may take action against Paxos, which creates and operates BUSD in conjunction with Binance, for breaching investor protection regulations.

The NYDFS ordered Paxos to stop minting the stablecoin.

Zhao expects US-pegged stablecoins to lose appeal as authorities crack down.

“I think given the current pressure and current stances taken by the regulators on the US dollar-based stablecoins I think that the industry will probably move away to a non-US dollar-based stablecoin and maybe also back to algorithmic (algo) stablecoins.”

He believes the collapse of TerraUSD (USTC) and the FTX exchange contributed to the development.

“I think basically this is going to force industry players to look for other options, non-USD-based and more algo stablecoins…

I think as a result of this, we will probably see more Euro-based or Japanese yen, Singapore dollar-based stablecoins. It’s actually prompted us to look for more options in different places. At the same time, we’re also looking at algo stablecoins.”