Stablecoins Legislation Would Increase Acceptance, According To Binance CZ

Key Points:

• Binance CEO Changpeng Zhao (CZ) stated that stablecoin regulation might hasten its adoption.
• Stablecoins’ advantages and applications are already being seen, according to CZ, in “cross-border payments, hedging against inflation, and even aid disbursement.”
• CZ said he “fully supports” the requirements for 1:1 backing and redemption at par while touting his exchange’s stablecoin BinanceUSD (BUSD).

According to a Feb. 1 Twitter thread, Binance CEO Changpeng Zhao (CZ) stated that stablecoins regulation might hasten its adoption.

The regulation of stablecoins, according to CZ, would “provide much-needed stability to issuers, users, and service providers.” Stablecoins are the subject of intense regulatory scrutiny.

Since Terra’s algorithmic stablecoin UST collapsed last year, stablecoin have been under more scrutiny. Financial regulators have boosted their supervisory efforts in this area in light of the risks the asset class poses to the larger financial system.

Stablecoins’ advantages and applications are already being seen, according to CZ, in “cross-border payments, hedging against inflation, and even aid disbursement.”

According to a Feb. 1 Twitter thread, Binance CEO Changpeng Zhao (CZ) stated that stablecoin regulation might hasten its adoption.

Hong Kong’s “determined approach” is praised by CZ

The Binance CEO praised the Hong Kong government’s “decided approach to stablecoins.”

CZ highlighted that Hong Kong’s approach will provide “a more defined scope for regulated activities, specifically governance, issuance, stabilization arrangements, and wallets – including access and holdings management.” He added that:

“[The] Adoption of a risk-based approach to decide which stablecoins are in scope, aiming to mitigate risk to monetary & financial systems – thus starting with fiat-backed.”

CZ said he “fully supports” the requirements for 1:1 backing and redemption at par while touting his exchange’s stablecoin BinanceUSD (BUSD).

The Hong Kong Monetary Authority (HKMA) recently published its regulatory plans that required stablecoin issuers to get licensed and prevented the proliferation of algorithmic stablecoin. HKMA said:

“Stablecoins that derive their value based on arbitrage or algorithm will not be accepted. Stablecoin holders should be able to redeem the stablecoins into the referenced fiat currency at par within a reasonable period.”

The Asian nation, the U.S., the European Union, Singapore, and Japan have all enacted different regulatory steps over the past year to stop another collapse like the one that occurred in Terra.

CZ stated he was anticipating the ideas from the Financial Stability Board and the Monetary Authority of Singapore (MAS), two international financial organizations (FSB).

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