‘Let's just diversify and see' — Binance CEO on its stablecoin strategy
Binance CEO Changpeng ‘CZ’ Zhao is looking to bring smaller algorithmic stablecoins to the market, in a bid to offer investors options other than the current global stablecoin giants.
Speaking in a July 31, ask me anything (AMA) session on Twitter, CZ cited risks associated with large stablecoins such as Tether (USDT) and Binance USD (BUSD), saying that while Tether is by far the largest stablecoin by market cap, he remains cautious of the asset due to its lack of transparency:
Even supposedly well-regulated and fully audited stablecoins such as Binance USD come with their own set of unforeseeable risks, he added.
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On Feb. 13, blockchain infrastructure platform Paxos Trust Company ended its partnership with Binance and ceased minting new BUSD stablecoins, following an order from the New York Department of Financial Services (NYDFS).
“We should just work with as many stablecoins as possible. We shouldn't have a single bet,” he said, highlighting that the regulator moved to shut down BUSD despite it being fully audited.
As a result of the regulatory and transparency risks, CZ revealed that Binance is working on algorithmic stablecoins as well as diversifying 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," he said, adding:
Cointelegraph reached out to Binance for further comment but did receive a response by the time of publication.
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