During an AMA session, Binance chief Changpeng Zhao (CZ) expressed concerns about the ‘stablecoin’ Tether (USDT), calling it a ‘black box’ with a ‘certain’ level of risk.
While USDT today remains the largest stablecoin by market capitalisation, Zhao remains cautious about the asset due to a lack of transparency.
“I personally haven’t seen any auditing reports from Tether. I think most people haven’t seen them either. So it’s kind of a black box, because we simply are not informed,” CZ explained.
He added that even “well-regulated and fully audited stablecoins, such as Binance USD,” are accompanied by their own unforeseen risks.
From February 21, the BUSD co-emitter Paxos terminated its cooperation with Binance and halted the issuance of new assets by order of the NYDFS.
Zhao said that his platform is working on an algorithmic “stablecoin” and is expanding partnerships with other stablecoin issuers.
“Our approach is this — given that everything carries some risk, let’s just diversify and see which one becomes bigger,” the CEO of the crypto exchange said.
In addition, the executive announced plans to launch First Digital USD (FDUSD) in Hong Kong, and signalled the creation of new stablecoins for Europe.
Earlier, Changpeng Zhao said the exchange was “in a major preparation” for a new Bitcoin rally. In his view, this could occur within the next 6–18 months.
Earlier in May, the head of Binance said that “I never understood meme tokens”. CZ himself does not actively participate in listing such assets on the platform.