Binance is Working on Multiple Algo Stablecoins, CEO Confirms
- Binance CEO Changpeng Zhao confirmed that his firm is working on several algorithmic stablecoins.
- The executive stated that there are significant risks to USDT due to its lack of transparency.
- He also cited concerns regarding audited stablecoins like BUSD because of regulatory issues.
- Zhao said that the crypto space “should just work with as many stablecoins as possible” and not depend on one.
The CEO of Binance, the world’s largest crypto exchange, Changpeng Zhao, also known as CZ in the crypto space, has confirmed that his firm is working on multiple algorithmic stablecoins despite the regulatory uncertainty prevailing in the industry and the fear among investors post the collapse of Do Kwon UST stablecoin (now USTC).
According to the statement given by Zhao during an ask me anything (AMA) session on X (formerly known as Twitter), there are serious issues tied to stablecoins like Tether (USDT) and Binance USD (BUSD). He noted that while USDT is the biggest stablecoin in the crypto space by market capitalization, investors should remain concerned regarding the lack of transparency.
“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,” said Changpeng Zhao during the AMA.
According to the crypto billionaire, well-regulated and fully audited stablecoins like Binance USD also come with several risks. It is important to mention here that blockchain company Paxos stated earlier this year that it would stop issuing new BUSD stablecoins due to regulatory pressure from agencies in the United States.
Zhao said that the crypto space “should just work with as many stablecoins as possible” and not “have a single bet,” while highlighting the fact that regulators have tried to shut down BUSD despite it being a fully audited stablecoin.
Due to regulatory and transparency risks, Binance and its team are working on algorithmic stablecoins and also seek to diversify its stablecoin partnerships to spread out potential risk.
“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,” CZ said.
Interestingly, this statement from Binance’s CEO comes at a time when regulators around the world are also working on stablecoins. The Hong Kong government has been asked to create the HK dollar stablecoin and lead the digital asset industry after the collapse of the UST stablecoin.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
