Changpeng Zhao forecasts expansion of non-dollar stablecoins

Rising regulatory scrutiny in the United States underscores growing demand for «stablecoins» not pegged to the U.S. dollar, said Binance CEO Changpeng Zhao (CZ).

According to the executive, the industry could begin looking for “other options” for stablecoins. In the future, “likely,” the role of euro-, yen-, Singapore dollar-denominated tokens and other currencies will grow.

“Given the pressure and regulators’ stance on USD-denominated stablecoins, this effectively prompted us to seek more options in different places”, he explained.

CZ also agreed that it makes sense to use gold-backed stablecoins. He explained that most people’s spending remains denominated in fiat currencies.

Zhao algorithmic stablecoins will gain prominence, which will carry risks.

According to CZ, both the vulnerabilities of algorithmic stablecoins and those backed by reserve currencies should be disclosed. This is necessary so that users clearly understand what is happening and make their own decisions about what to favor.

Zhao noted that dollar-based “stablecoins” remain important, as most people measure the returns on their investments in USD.

The investigation by the New York State Department of Financial Services into Paxos has begun. Later the regulator ordered the firm to halt the Binance USD (BUSD) stablecoin. The SEC likewise said it was prepared to sue Paxos.

Zhao advised crypto entrepreneurs to consider relocating to a country with favorable regulation for the industry. He regards Dubai (UAE), Bahrain and France as such jurisdictions.