Image Source: PixabayWith US regulators indeed reversing the Binance-branded BUSD stablecoin, the world's largest cryptocurrency exchange is now looking beyond US dollar-based stablecoins, and has garnered notable interest from potential partners.
Binance Chief Strategy Officer Patrick Hillmann stated that multiple public and private entities have shown interest in working with the exchange to launch another stablecoin, which may not be based on US dollars.
"There are some very exciting occasions, especially in Europe and the Middle East," Hillmann said in an interview with Forbes, without elaborating.
The idea of Binance issuing a non-US dollar stablecoin is not entirely new. Binance CEO Changpeng Zhao claimed in a Twitter post last week that the company was exploring other non-US dollar-based stablecoins and transmitters.
However, specialists asserted that such a pivot could prove quite difficult and that the stablecoin would hardly find significant adoption.
For example, the largest stablecoin that is not supported by US dollars is currently Euro Tether (EURT), which has a market capitalization of €70 million. By comparison, Tether (USDT), which is pegged to the dollar, has a market capitalization of over €XNUMX billion.
“One of the many reasons non-US dollar stablecoins have taken so long to become mainstream is regulation,” said Kevin Zhang, co-founder of DFX Finance, a decentralized finance protocol for different stablecoins. of the US dollar, he added. :
“Stablecoin transmitters are looking for ways to be properly regulated without making a lot of assumptions and wasting money on lawyers to get input.”
Zhang, however, noted that the recent hostility of US regulators creates an occasion for non-US dollar stablecoins. “Binance, with the size that it is and the reach that it has, is always going to be a relevant player in the stablecoin space. The denomination of trading pairs in certain stablecoins creates huge network effects,” stated-adds.
Last week, the New York City Department of Financial Services (DFS) ordered Paxos, a cryptocurrency company that issues the Binance USD (BUSD) stablecoin, to stop minting BUSD. Later, it was discovered that the SEC was planning to sue the company over its issuance of BUSD. The agency argued that BUSD is considered an unregistered security.
Binance loses its status in the United States
In addition to the saga surrounding its stablecoin, Binance has also faced increasing setbacks in the US on multiple other fronts. Last month, the exchange's banking partner, Signature Bank, raised the transaction minimums for US dollar transfers and announced that it would only process transactions from users with US dollar current accounts of more than €100,000.
The exchange also announced that it would provisionally suspend US dollar withdrawals and deposits for international service customers early this month.
And already before that, US authorities issued summons to US hedge funds and market-making firms that deal with Binance, requesting records of their communications with the exchange.