The Chief Executive Officer of Binance, Changpeng Zhao (CZ), recently spoke about the company’s plans regarding the launch of its own stablecoin. CZ mentioned that one of the reasons behind the introduction of the stablecoin FDUSD was the terminated partnership with Paxos. In 2019, Binance and Paxos collaborated to launch the USD-denominated BUSD. However, New York state regulators instructed Paxos to stop minting new tokens earlier this year.
Despite the termination of the partnership, CZ stated that Binance currently has no intention of listing its own stablecoin. Instead, the company plans to collaborate with other companies that specialize in stablecoin development. During a Twitter space event, CZ shared some of Binance’s plans regarding stablecoins. The crypto exchange recently added support for FDUSD, a stablecoin issued by Hong Kong custodian First Digital Trust.
CZ mentioned that Binance has been cooperating with stablecoin projects from various regions, and many other deals could follow the recent partnership. He hinted that another partnership based on stablecoins is in the works and will be announced in the near future.
The increased focus on stablecoins comes as a result of the suspended collaboration with Paxos. The New York Department of Financial Services ordered Paxos to stop issuing the Binance USD (BUSD) stablecoin earlier this year. The US SEC had alleged Paxos of selling unregistered securities during the token minting process. Despite this, Paxos has committed to supporting BUSD until February 2024, allowing customers enough time to convert their holdings into Pax Dollar (USDP) or cash them out in US dollars.
CZ also addressed concerns regarding the lack of audits for Tether (USDT), the largest stablecoin by market capitalization. He acknowledged that there have been issues with stablecoins, particularly with USDT, as audits for the token have not been made public. Binance’s partnership with Paxos aimed to offer a regulated stablecoin with audited processes. However, the regulatory shutdown in New York highlighted unforeseen risks associated with regulated stablecoins.
In addition to stablecoins, CZ revealed that Binance is interested in digital assets tied to the euro’s valuation and has a team working on algorithmic stablecoins. However, he cautioned that these types of stablecoins also carry their own risks due to their pegging to another highly volatile token.
CZ concluded by sharing his thoughts on the future of the cryptocurrency industry. He highlighted blockchain technology and Artificial Intelligence as transformative forces in the financial network, with AI potentially having a more direct impact. Despite being modest about his predictive abilities, CZ expressed his support for developers in the crypto industry and emphasized the importance of adapting to the evolving landscape.
In summary, Binance’s CEO, Changpeng Zhao, shed light on the company’s plans regarding stablecoins. Following the terminated partnership with Paxos, Binance aims to collaborate with other companies specializing in stablecoin development. The recent addition of support for FDUSD is just the beginning, with more partnerships and stablecoin projects on the horizon. However, CZ also highlighted the risks associated with stablecoins and expressed his interest in digital assets tied to the euro’s valuation. As the cryptocurrency industry evolves, Binance remains committed to supporting developers and exploring new opportunities.