Binance CEO suggests crypto industry use non-dollar stablecoins

Binance CEO suggests crypto industry use non-dollar stablecoins

In light of a lawsuit threat against Paxos, the issuer of the U.S. dollar-pegged stablecoin Binance USD (BUSD) issuer, Binance CEO Changpeng “CZ” Zhao recently proposed that the crypto industry use non-dollar stablecoins in the future.

CZ commented on a Twitter Spaces event on February 14 in response to a question about the possibility of the crypto industry adopting gold as a standard of value instead of the U.S. dollar.

CZ agreed and said it made sense to use gold. However, he also noted that most people’s expenses are still denominated in fiat currencies. The 46-year-old explained that most investors use dollars to measure their returns, which is why stablecoins backed by the U.S. dollar are “still important.”

The entrepreneur, however, argued that the recent actions taken by the U.S. Securities and Exchange Commission (SEC) against USD-backed stablecoins like BUSD would likely cause the global crypto industry to depend on non-dollar currencies such as the Japanese yen, euro and Singaporean dollar to back stablecoins.

According to the business executive, there has been a lot of pressure from numerous agencies on crypto stablecoins — saying, “USD crypto stablecoin market will shrink” — so the industry is considering its options.

CZ also predicted that algorithmic stablecoins would become more popular. However, he also cautioned that there would always be risks with algorithmic stablecoins that fiat-backed stablecoins wouldn’t have.

He insisted that users must know about these dangers, and they should also know about the reserves for fiat-backed stablecoins. The Chinese-Canadian CEO said this information allows users to make better-calculated decisions about which stablecoins to hold or use.

USD-backed stablecoins are popular among investors as a risk management tool. Even though other fiat-backed stablecoins exist, the market for USD-backed coins remains significantly more prominent. Over 10 percent of all digital currency market cap is in Tether (USDT), USD Coin, BUSD and DAI coin.