Binance's Changpeng Zhao says the company plans to "just diversify and see which <stablecoin> grows bigger."
As the world of cryptocurrency evolves, Binance's CEO, Changpeng “CZ” Zhao, is keen on offering more stablecoins in the crypto exchange's portfolio.
On July 31st, Binance's CEO discussed the firm's plans to explore smaller algorithmic stablecoins in a Twitter ask me anything (AMA) session.
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According to Zhao, the company aims to provide investors with more choices in the stablecoin market beyond the established players like Tether (USDT) and Binance USD (BUSD).
Expressing his concerns about the larger stablecoins' risks, CZ pointed out the ambiguity surrounding Tether, the market leader in terms of market capitalization.
I personally have not seen any audit reports of USDT. I don't think most people I spoke to have not seen that either. So it's kind of a black box because we just don't know.
CZ asserted that seemingly well-regulated stablecoins, including Binance USD, which has full audit trails, are not free from unpredictable risks. For instance, on February 13th, Paxos terminated its alliance with Binance and stopped issuing new BUSD stablecoins, complying with an order from the New York Department of Financial Services.
In response to the risks associated with regulations and transparency, Binance is developing algorithmic stablecoins and expanding its partnerships in the stablecoin sector to mitigate potential dangers.
We actually have a small team working on algo stablecoins in different places that are not high scale, but they are very relevant locally in those places. So our approach is, you know, given everything has some risk, let’s just diversify and see which one grows bigger.
As Binance's expansion plans in the stablecoin market continue, the firm also announced the introduction of the First Digital USD in Hong Kong and their interest in exploring new stablecoin opportunities in Europe.
The First Digital USD is a programmable stablecoin pegged to the US dollar, managed by First Digital Group, and licensed in Hong Kong. On July 26th, the FDUSD stablecoin was listed on Binance.
Despite these promising developments, Binance faces regulatory challenges. Recently, on July 27th, CZ attempted to dismiss a $1 billion lawsuit lodged against him and Binance by the Commodities Futures Trading Commission, claiming the regulator was "overreaching" its jurisdiction.
