The intensifying regulatory oversight in the U.S. is highlighting the increasing need for non-U.S. dollar-pegged stablecoins in the cryptocurrency industry, Binance Chief Executive Officer Changpeng Zhao said on Tuesday.
See related article: Be careful what you wish for? Regulators pick up pace in the crypto industry crackdown
Fast facts
- The industry will likely “look for other options” as regulatory pressure mounts in the U.S., Zhao said during an event hosted by Binance on Twitter, adding that more stablecoins pegged to the euro, Singapore dollar, and other currencies may emerge.
- Earlier this week, Paxos Trust Company was ordered by the New York Department of Financial Services to stop minting the Binance USD (BUSD) stablecoin.
- Paxos, the New York-based manager of the BUSD, also received a notice from the U.S. Securities and Exchange Commission that alleged its stablecoin is an unregistered security.
- BUSD, a dollar-pegged stablecoin based on the Ethereum blockchain, was co-developed by Binance and Paxos. The fiat-backed stablecoin’s issuance and redemption are managed by Paxos.
- In response to U.S. regulators’ crackdown on Paxos, Zhao said that BUSD was not issued by Binance and that the exchange has an agreement that allows Paxos to use its brand.
- The BUSD market cap has dropped by more than US$800 billion since Monday, according to CoinMarketCap data.
See related article: SEC may make it harder for hedge funds to work with crypto firms: Bloomberg
