Binance AMA | CZ predicts the diversification of stablecoins, stating that stablecoins from Europe, Japan, and algorithmic stablecoins are all being considered and negotiated.

Binance founder Changpeng Zhao CZ mentioned in an AMA that BUSD has never been a big business for Binance: "When we launched BUSD, we thought that BUSD might fail."

BUSD, Regulatory Issues

EUR and JPY Stablecoins Under Consideration and Negotiation

User @newventureman inquired about the series of stablecoin issues triggered by the TerraUSD collapse and BUSD regulation, asking what alternatives might emerge after UST. Why are stablecoins always pegged to the US dollar? Why not consider stablecoins collateralized by hard assets like gold?

CZ pointed out the importance of stablecoins, as they are the currency most people use for payments. The dominance of USD stablecoins is because the global pricing is still mostly in USD. However, considering recent regulatory issues, the crypto space could indeed shift towards non-USD stablecoins, with algorithmic stablecoins also being considered.

He mentioned that this shift began with the Terra collapse. Based on their experience, regulations often change abruptly, and the process of improvement is lengthy. With FTX adding fuel to the fire, the industry could potentially shift towards options like Euro, Yen, Singapore Dollar, among others.

Algorithmic stablecoins are not ruled out, but they come with significant risks, especially when using incorrect assets as collateral. Therefore, the reserve assets must be handled in a completely transparent manner. For example, with Terra, although they claim to have Bitcoin as part of their reserves, it's unclear where exactly the Bitcoin is being used.

CZ also revealed that he has received many self-recommendations for algorithmic stablecoin projects recently, and he will continue to monitor developments in that area.

Regarding the BUSD issue, CZ emphasized that the issuer, Paxos, holds a 1:1 reserve, ensuring that users can always redeem their BUSD without facing any financial issues like depreciation.

Overall, considering the regulatory pressures stablecoins are facing, multiple discussions have taken place with Binance, including options like Euro stablecoins, Yen stablecoins, etc. CZ believes this diversification of stablecoins is a positive development.

BUSD Likely to Take Years to "Clear Out"

CZ believes that it may take several years for BUSD to be completely phased out. This is because there may be users holding BUSD in cold wallets for the long term, and there are also users holding BUSD on the BNB Chain and Ethereum chain, possibly due to wallet preferences or reluctance to transfer to exchanges, among other reasons.

He emphasized:

There are USDT, USDC, and other stablecoins in the market. I expect stablecoins to diversify. It's always a case of one falling while another rises. To be honest, BUSD was never a big deal for Binance. When we launched BUSD, we thought it might fail.

Can BUSD Help Boost BTC?

@ItsMarcosDiaz asked if there has been a significant trend of converting BUSD to BTC after regulatory scrutiny.

CZ stated that there hasn't been a rush to convert BUSD into BTC. However, whenever FUD events occur, trading volumes do increase. He noted users exchanging for other stablecoins, but no other abnormal trading activities were observed.

Criticism of Bloomberg's Reporting

Responding to a question from @0xElegant, CZ criticized Bloomberg's report about Circle warning the New York Department of Financial Services about insufficient BUSD reserves.

He emphasized that he truly doesn't believe Circle would do such a thing, as it would only harm the entire industry.

No Season of Regulatory Crackdowns

@IrinaHeaver mentioned that the SEC has initiated a season of crypto crackdowns. What is Binance's response?

CZ pointed out that the SEC wouldn't openly declare a season of crackdowns on the crypto space, but there has indeed been an increase in attention.

CZ tactfully mentioned that different jurisdictions have different regulations; Dubai is very positive, and France is great. However, when crypto companies or projects want to enter the US market, they absolutely need legal and regulatory experts to ensure they don't cross any lines.

Despite this, the overall regulatory landscape remains unclear, and CZ is unsure about the SEC's "come talk to us" policy and what hurdles need to be crossed.

Next IEO Date?

@ekataCT asked about the Wen launchpad?

CZ chuckled a bit before stating that several projects are in the pipeline, and it usually takes 6 to 9 months for formal release after review. He's unsure of the exact launch date.

No NFT Holdings

CZ is optimistic about the NFT ecosystem that has emerged around Bitcoin recently, considering Bitcoin the most decentralized protocol.

Another user, @AaronSage, asked CZ about his NFT holdings.

CZ mentioned that he doesn't hold any NFTs. He's neither an art collector nor a music listener, and he doesn't actually buy coins. He only holds BNB and BTC. However, he does see the potential of NFT as a technology, and the crypto space is currently exploring other uses for NFTs.

He mentioned receiving NFTs at some summits but isn't sure where they are stored.

Progress on Self-Custody Promotion

@iLoveJaneAdams mentioned CZ's strong advocacy for users to self-custody cryptocurrencies during the FTX collapse in November. What are the plans for this?

CZ stated that he isn't aware of specific plans as he doesn't get involved in projects Binance invests in. However, Binance strongly supports wallet projects, such as hardware, multi-signature, social, mobile wallets, etc. Binance will invest in more similar projects in the future.

South Korea

Renowned analyst @DefiIgnas inquired about Binance's second foray into the South Korean market, following the launch of the Korean exchange Binance KR in 2020, which was eventually shut down. Recently, Binance acquired the local exchange Gopax. What is the strategy for this second entry into South Korea?

In response, CZ mentioned that South Korea is one of the most important and active markets in Asia. He recalled that Binance KR was closed due to the low competitiveness of local partners, and the acquisition of Gopax was driven by financial issues. Binance will introduce more products in South Korea in the future.